Wholesale declines .. Global markets vibrate under the weight of American customs duties

Global financial markets have witnessed a sharp decline. US President Donald Trump for the imposition of customs duties on imports from Canada, China and Mexico, as well as threatening to impose fees on the European Union. This escalation in commercial policies added more ambiguity among the investors, who resorted to safe assets as investment aids. The decision led to the decline in the futures contracts, and the increase in concerns about its negative effects on the global economy, especially with the increasing possibilities of long -term repercussions on major economies.

Despite the disturbances that ravaged the markets, many analysts asked: Why is this decision surprising? It was not new, but rather was part of Trump’s promises since the beginning of his campaign. He continued to repeat these promises after his victory in the elections, as he referred to specific numbers and dates to start implementing these fees last week.

In this context, traders on the “Barons” website stated that many traders were questioning fundamental changes. On the contrary, the shares witnessed a remarkable recovery in January, driven by the optimism of investors that canceling the tax restrictions and discounts will contribute to enhancing corporate profits.

The reason that made investors ignore these somewhat clear signals is that customs definitions do not seem logical, according to “Barons”. George Saravilus, a strategic expert at Deutsche Bank, indicated that customs tariffs are three times larger than what was priced in the market – and five times the cumulative measures taken by Trump during his first term. Investors linked this decision to an escalation of commercial tensions, which raised anxiety about the high costs and the impact of this on global economic activity. The markets reflected a quick reaction to the re -evaluation of risk, as many analysts considered that this step represents a more strict trend in American commercial policy, and not just a negotiating tool as it was previously expected. On the other hand, experts warned that commercial escalation may lead to increased inflation due to the high costs of imports, which may force the Federal Reserve to adopt more strict monetary policies.

In the face of these developments, Trump acknowledged that the new measures may impose some burdens on American consumers, but he stressed that the cost will be “due” in the end. On the other hand, Paul Ashworth warned of “Capital Economics” that this step may contribute to accelerating the pace of inflation faster than expected. For his part, Greg Daco, the Ernst & Young chief economist, expected the customs duties to reduce American economic growth by 1.5 percentage points this year, with the possibility of Canada and Mexico in a stagnation, while the United States faces the risk of “inflationary stagnation “It is characterized by slow growth and high inflation at the same time. In the markets, strategists from “Barclays” indicated that these fees may lead to a decline in the profits of the “Standard & Poor’s 500” index by 2.8 percent, in light of the direct and indirect effects of these procedures, including the revenge reactions of the trading partners.

The stocks are declining amid concern about the repercussions
Global stock markets and currencies fell amid fears that customs duties will lead to a commercial war that harms the economy. The “Standard & Poor’s 500” index fell 1.4 percent in early trading after similar losses to stock markets in Asia and Europe. The Dow Jones Industrial Index also decreased by 435 points, or 1 percent, while the NASDAC complex index decreased by 1.8 percent. In “Wall Street”, some of the largest losses were the share of major technological companies and other companies that may be more affected by the high interest rates. The shares of automobile companies, which are imported extensively from Mexico, and the shares of “General Motors” decreased by 5 percent.

Instead of coded stocks and currencies, investors moved to US government bonds, which are considered one of the safest investments. Short -term bond returns rose on Monday at a time when expectations were reduced by federal reserves. The return on bonds increased for two years to 4.24 percent from 4.21 percent. High returns put pressure on all types of investments, but they represent a special burden on shares that are the most expensive. This highlights companies such as “Invidia” and other winning companies from the prosperity of artificial intelligence. And the shares of “Invidia” decreased by 5.3 percent and was the largest contributor to the “Standard & Poor’s 500” index.

European stocks fell, and the European “Stoxx 600” index fell 1.3 percent, recording its largest daily decline this year. At noon in Europe, the German “DAX” index decreased by 2 percent, and the French “CAC” index fell 1.9 percent. The shares of the largest European car manufacturer, which is one of the most vulnerable to customs duties, also decreased by more than 3 percent, while technology shares in the region were among the largest losers, as it decreased by more than 2 percent. The European Currency (the euro) also fell 0.9 percent. The British “Fotsi 100” index fell 1.3 percent, while the value of the sterling pound fell 0.4 percent after Trump stated that the UK may be able to avoid customs duties despite “incompatibility” in trade, but he stressed that this may not be possible With the European Union.

The stocks in Tokyo ended up with a decrease of about 3 percent and the main index of Australia – which is often considered an indication of Chinese markets – decreased by 1.8 percent. As for the stocks in Hong Kong, which include the infections of Chinese companies, they ended their trading unchanged after resuming from the Chinese New Year. While the Chinese market will resume on the mainland its trading on Wednesday.

The Mexican Bzo has decreased 1.8 percent to its lowest level in about three years, as more than 80 percent of Mexico’s exports to the United States go to the United States, its largest commercial partner ever. The Canadian dollar fell significantly against the US dollar, affected by the fluctuations of the market, as it decreased 1 percent to reach 1.4665 Canadian dollars against the US dollar, equivalent to 68.19 American cents, after it ranged between the day between 1.4599 and 1.4793. Elsewhere, the assets in South Africa declined after Trump announced his decision to cut funding for the country. The Rand decreased by 1.2 percent, the 2030 -year -old government bond decreased and the return increased by 16.5 basis points to 9.22 percent. The main stock index lost 0.8 percent.

The Chinese external yuan also reduced some of its losses after it touched its lowest level at 7.3765 against the dollar, while the shares of Hong Kong closed almost stable after it recorded its lowest level in more than a week. The dollar bonds issued in the economies of emerging markets, such as Egypt, Jordan and Kenya, declined. The MSCI index, which tracks the global emerging market currencies, decreased by 0.5 percent to levels that the market has not seen two weeks ago, while the stock index decreased by 1.8 percent.

Bitcoin, the world’s largest encrypted currency in the world, recorded its lowest level in three weeks at 91441.89 dollars, a decrease of 6.2 percent. On the other hand, the smaller cryptocurrency “Ethar” has lost about 25 percent of its value since Friday, recording its largest decline in three days since November 2022; It reached $ 2592.14.

On the other hand, gold regained its early losses on Monday, and in the immediate transactions reached its highest level at $ 2818.27 an ounce thanks to the demand for yellow metal as a safe haven, driven by fears of slowdown and inflation, which was ignited by customs duties.

Industrial mineral prices are declining
The prices of industrial minerals on the London Metal Stock Exchange fell; Where the copper fell to its lowest level in 4 weeks, affected by the concerns that the American customs duties on imports may cast a shadow over economic growth and demand. Standard copper fell 0.7 percent to $ 8,985 per metric ton in official trading, after it touched its lowest level since January 6 at 8914.50 dollars. The price of aluminum for three months also fell 0.6 percent to $ 2579 per ton. The bullets fell 0.3 percent to 1944 dollars, the tin fell 1.2 percent to $ 29750, and the nickel 0.7 percent to 15110 dollars, while zinc rose 0.1 percent to 2745 dollars. (The Middle East)