U.S. Trade Policy Uncertainty Sends Ripples Through Global Markets

Analysts have expressed concerns over the uncertainty surrounding U.S. trade policy, which is likely to keep market sentiment cautious. The newly implemented tariff policies by the U.S. have had a significant impact on various sectors, including the cryptocurrency market, leading to a decline in both digital assets and overall market confidence. The lack of clarity in trade policy makes it challenging for U.S. companies to plan for the future and make investments, potentially leading to a decline in new orders and other economic indicators.

The U.S. has recently implemented additional tariffs on China, Canada, and Mexico, which are expected to have a significant impact on these economies. The U.S. is also considering charging Chinese-made ships US$1 million or more per visit to U.S. ports, further complicating trade relations. Canada and Mexico are bracing for the immediate impact of 25% blanket U.S. tariffs, which are likely to induce an economic contraction in the coming months if the tariff rate is indeed the full 25%.

The Department of Commerce has announced its intention to nearly triple anti-dumping duties against Canadian softwood lumber, taking the rate from 7.66% to 20.07%. Steel and aluminum tariffs are scheduled to be applied on March 12, which are set to be slightly more intense than those implemented in 2018. Canada is the largest exporter of both steel and aluminum to the U.S., and these tariffs will be applied on top of the pre-existing 25% tariff. The U.S. is also considering reciprocal tariffs, which aim to impose tariffs on countries that already levy tariffs on the U.S. This policy could potentially persuade those countries to tear down their own trade barriers, resulting in a net improvement in international trade.

The U.S. is also considering the scale of non-tariff barriers that limit access for U.S. firms, the degree of currency undervaluation, and even whether a country imposes a sales tax on foreign goods. The U.S. has indicated that these tariffs are set to be applied on April 2, even if technically there is supposed to be a second round of studies after April 1 before tariffs are implemented. The uncertainty surrounding these policies is likely to keep market sentiment cautious, as investors remain wary of the potential impact on the economy.

Despite the short-term anxiety caused by