Published by Global Banking & Finance Review®
Posted on January 21, 2025
5 min readLast updated: January 27, 2026
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Global markets are volatile as Trump considers tariffs on Canada and Mexico. Analysts discuss potential impacts on currencies and trade.
SINGAPORE/LONDON/NEW YORK (Reuters) - Global markets were volatile while the dollar rebounded on Tuesday in choppy trading as Donald Trump's returned to the White House.
President Trump did not immediately impose tariffs on Monday as previously promised, but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1 over illegal immigrants and fentanyl crossing into the U.S.
While the Mexican peso and Canadian dollar fell against the greenback, European shares dipped in early trade and U.S. stock futures were firmer.
Here are some comments from investors and analysts:
AMELIE DERAMBURE, SENIOR MULTI-ASSET MANAGER, AMUNDI:
"Markets will clearly try to anticipate and dissect which sectors and areas will be targeted by tariffs so the volatility on markets will come from that."
"European assets, especially equities, will be volatile because tariff news wil be especially important for Europe."
MARK HAEFELE, CHIEF INVESTMENT OFFICER, UBS GLOBAL WEALTH MANAGEMENT:
"Our base case for the U.S. economy is for ‘growth despite tariffs.’ While we will be closely monitoring for risks, we do not believe that the tariff measures outlined in our base case would be sufficient to derail U.S. growth. Nor do we believe that such tariffs would preclude inflation continuing to fall from current levels, enabling the Fed to cut rates by 50 bps later this year."
JIM REID, GLOBAL HEAD OF MACRO STRATEGY, DEUTSCHE BANK, LONDON:
"A lack of immediate moves on tariffs supported the market mood yesterday, but this has partially reversed overnight as late in the day Trump renewed an immediate threat of 25% tariffs on Canada and Mexico, which could be announced as soon as February 1st."
KYLE RODDA, SENIOR MARKETS ANALYST, CAPITAL.COM, MELBOURNE
"It's Trump's world and we are all just living in it - and the markets are going to have to get used to that again. I think the price action in currencies tells you a clearer story about trade war risks and the signals are pretty apparent - tariffs mean a stronger U.S. dollar due to higher import prices and weaker global growth, no tariffs means stronger global trade and a more robust global growth backdrop."
"Just like the first Trump administration, the markets are highly sensitive to headline risk, especially as it relates to trade wars."
CHARLES WANG, CHAIRMAN OF SHENZHEN DRAGON PACIFIC CAPITAL MANAGEMENT CO, SHENZHEN:
"You don't expect Trump's inauguration to trigger a big rally, as it's unrealistic for Sino-U.S. ties to suddenly reverse … and you don't read too much into the words of Trump, who is very fickle."
"I think Trump is now more pragmatic toward China."
KIYONG SEONG, LEAD ASIA MACRO STRATEGIST, SOCIETE GENERALE, HONG KONG:
"While there was no immediate tariff imposed on China, providing some relief to the market, President Trump has initiated tariffs on Canada and Mexico. It is unlikely that he will alter his plan regarding tariffs on China."
"A potential delay in the imposition of tariffs on China could also lead Chinese authorities to abstain from implementing a definitive stimulus. In such a scenario, renewed market skepticism about China's growth recovery may overshadow the tariff narrative, as an inadequate stimulus to bolster domestic consumption would underscore the growth disparity between China and the U.S."
SHOKI OMORI, CHIEF GLOBAL DESK STRATEGIST, MIZUHO SECURITIES, TOKYO:
"Twenty five percent looks high as a starter, and markets reacted quickly, especially in FX. I think market participants thought Trump would start with China, with say a 10%-20% tariff on goods but gradual increase."
"USDCNH (dollar/Chinese yuan) cheapening is temporary, I doubt it will continue. USDCNH is set to go lower with the Trump administration coming up with tariffs."
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE
"The first few hours of Trump administration has underscored that policy environment will be dynamic once again and markets should brace for volatility. Clearly, the markets celebrated too soon with tariff threats missing at the outset in Trump’s inaugural speech."
"However, the respite was short-lived and latest announcement on Canada and Mexico tariffs likely to be enacted Feb 1 reaffirmed that the tariff threat was only delayed and not averted. Still, the absence of any threats on China has kept the hopes of a negotiation alive there, especially after the Trump-Xi phone call last week as well."
ANDREW SWAN, PORTFOLIO MANAGER, MAN GLG. SYDNEY
"I'll say one positive surprise we may see this year is actually some sort of resolution between U.S. and China from an economic point of view, not a strategic point of view. At least an economic sort of deal to be done so the risk is actually lower tariffs. That will be extremely positive for Asia."
VIS NAYAR, CHIEF INVESTMENT OFFICER, EASTSPRING INVESTMENTS, SINGAPORE:
"Tariffs are necessarily an overhang. I would just say that we simply don't know, what we had was pressure on the currency and pressure on markets in the lead-up to yesterday. So he (Trump) didn't announce anything (on China), which is naturally a little bit better than we might have expected. I think we should expect volatility."
"But there is hope that there is some pragmatism. We have to assume that he's not going to do anything that just brings up U.S. inflation without paying attention to that."
(Reporting by Ankur Banerjee, Kevin Buckland, Rae Wee, Yiming Shen, Winni Zhu, Saeed Azhar, Aida Pelaez-Fernandez, Dhara Ranasinghe, Naomi Rovnick and Gertrude Chavez-Dreyfuss; Compiled by Karin Strohecker and Gertrude Chavez-Dreyfuss; Editing by Stephen Coates)
The article discusses market reactions to Trump's potential tariffs on Canada and Mexico and the broader economic implications.
Tariffs can lead to currency fluctuations, impact trade balances, and create volatility in stock markets.
Analysts suggest that tariffs could strengthen the U.S. dollar and affect global growth, with markets remaining sensitive to trade news.
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