(Bloomberg) — The dollar rallied and Asian stocks briefly erased opening gains after US President Donald Trump said he was considering enacting previously threatened tariffs on Canada and Mexico starting next month.
The greenback strengthened against all its Group-of-10 peers except the yen after Trump said he was planning to enact tariffs of as much as 25% on Mexico and Canada by Feb. 1. Treasuries rose. Benchmark share indexes gained in Australia and Hong Kong and were little changed in China after Trump opted against announcing any new Chinese tariffs on his first day in office.
“The tariff respite was short-lived, as expected, with the latest headline signaling that tariffs have been delayed but not averted,” said Charu Chanana, chief investment strategist at Saxo Markets. “However, it seems like Canada and Mexico are in the focus but negotiation hopes are kept alive for China, suggesting China markets may still be supported.”
Bloomberg’s dollar gauge rose as much as 0.7% after being lower on the day at the start of Asian trade. The Canadian dollar slid 1.4% and the Mexican peso slipped 0.9%. US Treasury 10-year yields declined 7 basis points to 4.55%.
Investors had been on tenterhooks for the first executive orders to stem from the White House after Trump vowed to quickly implement his “America First” agenda. Since his November election victory, everything from the Australian dollar to European equities have been whipsawed on concern widespread tariffs would add to global trade frictions, while the dollar surged as the Federal Reserve turned more cautious on easing policy.
“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people,” into the country, Trump said in response to questions from reporters, in comments made at the Oval Office. “I think we’ll do it February 1.”
Trump refrained from unveiling any China-specific tariffs on his first day in office, instead ordering his administration to address unfair trade practices globally and investigate whether Beijing had complied with a deal signed during his first term.
The 25% figure for Canada and Mexico is “aggressive, and the tight Feb. 1 deadline leaves little time for negotiation,” said Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities. “Hong Kong and China may not be insulated from this.”
Key events this week:
- UK jobless claims, unemployment, Tuesday
- Canada CPI, Tuesday
- ECB President Christine Lagarde and other officials speak at Davos, Wednesday
- South Korea GDP, Thursday
- Eurozone consumer confidence, Thursday
- Trump will join the World Economic Forum for an online “dialogue”
- Japan CPI, rate decision, Friday
- India, euro area, UK PMIs, Friday
- ECB President Christine Lagarde and BlackRock CEO Larry Fink speak at Davos, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 11:11 a.m. Tokyo time
- Nikkei 225 futures (OSE) rose 0.1%
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 rose 0.6%
- Hong Kong’s Hang Seng rose 0.6%
- The Shanghai Composite fell 0.1%
- Euro Stoxx 50 futures fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.4%
- The euro fell 0.4% to $1.0377
- The Japanese yen rose 0.2% to 155.32 per dollar
- The offshore yuan fell 0.3% to 7.2834 per dollar
Cryptocurrencies
- Bitcoin fell 0.5% to $102,014.39
- Ether fell 0.5% to $3,263.7
Bonds
- The yield on 10-year Treasuries declined eight basis points to 4.54%
- Japan’s 10-year yield declined one basis point to 1.180%
- Australia’s 10-year yield declined six basis points to 4.42%
Commodities
- West Texas Intermediate crude fell 1.5% to $76.74 a barrel
- Spot gold rose 0.5% to $2,720.75 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Liz Capo McCormick, Abhishek Vishnoi, Georgina McKay, Winnie Hsu, Ruth Carson and Masaki Kondo.
©2025 Bloomberg L.P.
