- The NZD/USD jumps at about 0.5850 while the US dollar suffers a hard blow after the day of liberation.
- The president of the United States Trump announces 34% reciprocal tariffs on China, which add up to the import rights of 20% taxes in March.
- The US ISM Services PMI rose at a moderate rate in March 50.8.
The NZD/USD pair advances quickly at about 0.5850 in the American session on Thursday. The Kiwi pair is strengthened while the US dollar (USD) suffers a strong fall after the so -called “Liberation Day” on Wednesday, when US president Donald Trump reveals reciprocal tariffs, along with a base tax of 10% for all imports to the US.
The Trump tariffs has strongly weighed over the US dollar amid fears that the greatest import rights could lead to the US economy to a recession. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, collapses to about 101.30, the lowest level seen in six months.
The US variable rental markets face a massacre in their opening session, since investors expect the load of higher tariffs to fall on national importers. Such scenario will increase the cost of supplies for US companies, which points to a strong decrease in their operational margins.
Meanwhile, the fears of a recession in the US could force Federal Reserve (FED) officials to review their monetary policy position. Until now, those responsible for the Fed had been guiding a restrictive monetary policy position, since they were significantly concerned about the possible inflation driven by tariffs.
In the economic data front, US ISM services PMI data for March have been weaker than expected. The PMI of Services was significantly lower in 50.8 compared to estimates of 53.0 and the previous publication of 53.5.
In the Asia-Pacific region, the prospects of the New Zealand economy (NZ) have been tarnished since Trump has announced an import right of 34% on China imports. This will be added to the tariffs of 20% already taxes, which were announced for the introduction of drugs in the USA, however, China could escape the rights of 20% if you are willing to reduce fentanyl exports in the economy, said US secretary of the US Lutnick during negotiation hours in North America.
New concerns about Chinese economic perspectives weigh on the New Zealand dollar (NZD), given that the New Zealand economy exports sector (NZ) depends largely on China.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
