[ad_1]
President Trump signed an Executive Order raising tariffs on Chinese goods to 20%, effective March 4. He also reaffirmed 25% tariffs on Canadian and Mexican goods, stating:
“No room left for Mexico or for Canada. No. The tariffs you know, they’re all set. They go into effect tomorrow.”
Economists warn higher tariffs could impact the economy, while pushing up US import prices and fueling inflationary pressures. A higher inflation outlook may delay Fed rate cut bets, increasing financing expenses. This could impact company earnings and dampen demand for risk assets.
US Manufacturing PMI Signals Waning Demand
On March 3, the ISM Manufacturing PMI fell to 50.3 in February, down from 50.9 in January. Significantly, the New Orders Index dropped from 55.1 in January to 48.6% in February, signaling a fall in demand. Manufacturers responded to weaker new orders, cutting staffing levels. Firms highlighted tariff uncertainties in the February survey.
The softer Manufacturing PMI reading raised concerns about the US economy, contributing to Monday’s market sell-off. The tariff and US data-fueled sell-off set the tone for the Asian session on Tuesday, March 4.
Global Trade War Risk Intensifies
On March 4, Canada announced plans for retaliatory tariffs on US imports if US tariffs go into effect. David Scutt, market strategist at StoneX, commented:
[ad_2]
