- US President Donald Trump has announced that 5% tariffs on Mexican imports will begin from June 10. Trump has threatened to lift these tariffs to as high as 25% by the start of October.
- US stockmarket futures have tumbled close to 1% on the news. US 10-year bond yields have also fallen to the lowest level since September 2017.
- The Japanese yen is strengthening while crude oil futures are continuing to slide.
US stockmarket futures are tumbling on news that US President Donald Trump will introduce tariffs on Mexican imports entering the country from June 10.
….at which time the Tariffs will be removed. Details from the White House to follow.
— Donald J. Trump (@realDonaldTrump) May 30, 2019
S&P 500 futures are currently down close to 1%, falling to levels last seen on March 11 this year. From the record peak of 2961.25 set at the start of this month, front-month S&P 500 futures have now fallen 6.5%.
Benchmark 10-year US bond yields have also tumbled, falling to as low as 2.18% — a level last seen in September 2017.
10-year note yields traded as high as 3.25% late last year.
After tumbling 4% on Thursday, crude oil futures are continuing to slide with both Brent and WTI off around 1.5%.
In currency markets, the Japanese yen is attracting safe haven flows with the USD/JPY dipping to 109.29, down 0.28% from Thursday’s close.
The moves elsewhere, including in the US dollar index (DXY) have been limited to this point.
“In a statement issued by the White House, Trump said the initial 5% tariff on Mexican goods will be gradually increased if illegal immigration across the US-Mexico border fails to stop.
Tariffs would be increased to 10% on July 1, lifting by a further 5% at the start of each month until tariffs eventually rise to 25% at the start of October.
“Mexico’s passive cooperation in allowing this mass incursion constitutes an emergency and extraordinary threat to the national security and economy of the United States,” Trump said in the statement, Reuters reports.
“Mexico has very strong immigration laws and could easily halt the illegal flow of migrants, including by returning them to their home countries.”
The United States has already slapped 25% tariffs on $US250 billion worth of Chinese imports entering the country, and has threatened to slap all Chinese goods imports with tariffs should no trade deal between the two nations be agreed.
Late last year, Trump described himself as a “tariff man”. He’s living up to that reputation.
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
— Donald J. Trump (@realDonaldTrump) December 4, 2018
Business Insider Emails & Alerts
Site highlights each day to your inbox.