Published by Global Banking & Finance Review®
Posted on April 2, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleThe US dollar fell against the yen while the euro held gains after President Trump announced new tariffs, potentially escalating global trade tensions.
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The dollar slid against the yen, while the euro held gains against the greenback on Wednesday as U.S. President Donald Trump announced global reciprocal tariffs that look certain to escalate a trade war with global partners.
Trump said he would impose a 10% baseline tariff on all imports to the United States and higher duties on some of the country's biggest trading partners. He held up a board showing the new rates charged on most countries, with tariffs ranging from 10% to as high as 49%.
With a few exceptions, based on the charts Trump read out, the tariff rate being imposed by the U.S. on most countries was around half of what those countries charged. There were some exceptions in which the U.S. charged the exact rates that those countries charged, according to the chart.
In late trading after Trump reiterated that the U.S. would impose 25% tariffs on foreign-made autos, the dollar turned 0.2% lower against the yen to 149.255 yen after trading higher for most of the session.
The euro, meanwhile, initially surged, posting a more than 1% rise against the dollar, before retreating to trade 0.3% higher at $1.0828.
"What a roller coaster," said Helen Given, director of trading at Monex USA in Washington. "Hundred basis-point swings aren't something you see every day, even in the choppy trading that's characterized this administration, but as the dust is settling it looks like markets are taking this announcement, particularly the country-specific measures, as 'not the worst-case scenario."
Against major currencies, the yen partly regained its luster, remaining down the day against the euro, which remained 0.4% higher at 161.82 yen.
Against the Mexican peso, the dollar was little changed at 20.18. Versus the Canadian dollar, the greenback dipped 0.1% at C$1.421.
The Trump tariffs are "going to result in lots of tit-for-tat negotiations - what concessions can be made to get these down, whatever leverage the U.S. exerts to get other countries to do something to get these tariff levels down, whether it's defence considerations in Europe and/or Japan," said John Hardy, chief macro strategist at Saxo Bank in Copenhagen.
"China, I suspect, sticks. So the Chinese response could be quite interesting."
Meanwhile, worries about the impact of an escalating global trade war on the world's largest economy and a slew of weaker-than-expected U.S. data have stoked recession fears and in turn undermined the dollar this year.
Given nervousness about the tariff announcement, the dollar reacted little to data showing U.S. private payrolls increased more than expected in March. Private payrolls rose by 155,000 last month after an upwardly revised 84,000 rise in February, according to the ADP National Employment Report.
There was also minimal reaction to a report indicating that factory orders rose 0.6% in February, after an upwardly revised 1.8% rebound in January. Economists polled by Reuters had forecast factory orders would climb 0.5% after a previously reported 1.7% advance in January.
Canadian Prime Minister Mark Carney spoke with Mexican President Claudia Sheinbaum on Tuesday about Canada's plan to "fight unjustified trade actions" by the United States, the prime minister's office said.
Bank of Japan Governor Kazuo Ueda, meanwhile, said on Wednesday that planned new U.S. tariffs could have a huge impact on world trade, warning of a possible hit to global growth.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Laura Matthews in New York, Harry Robertson in London, and Rae Wee in Singapore; Editing by Marguerita Choy, Mark Potter and Diane Craft)
The article discusses the impact of new US tariffs on the dollar's exchange rates against the yen and euro.
The euro initially surged but later settled with a 0.3% gain against the dollar.
The tariffs could lead to a global trade war, affecting currency markets and economic growth.
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