The USD is sharply lower vs the EURUSD, USDJPY and GBPUSD after the “Liberation Day” tariffs. As a review, below are the current new tariff view for the EU, JPY and GBP
European Union (EU):
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Baseline Tariff: A 10% tariff was imposed on all foreign imports
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Reciprocal Tariff:An additional 20% tariff was applied specifically to EU imports, bringing the total to 30%.
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Steel and Aluminum: A 25% tariff on steel and aluminum imports from the EU took effect on March 12, 2025.
Tariffs on Japanese Imports:
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Baseline Tariff: A universal 10% tariff on all imports was introduced, effective April 5, 2025.
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Reciprocal Tariff: An additional 24% tariff was imposed specifically on Japanese imports, bringing the total to 34%. This higher rate was scheduled to take effect on April 9, 2025.
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Automobile Imports:Separately, a 25% tariff on all automobile imports, including those from Japan, took effect on April 3, 2025.
United Kingdom (UK):
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Baseline Tariff: The UK faced the general 10% tariff on all imports.
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Reciprocal Tariff:Unlike the EU, the UK was spared additional reciprocal tariffs due to strategic negotiations post-Brexit.
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Steel and Aluminum: Despite previous exemptions, a 25% tariff on UK steel and aluminum imports was imposed, effective March 12, 2025.
FYI, the top 10 trading partners with the US:
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Mexico: 14.5%
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Canada: 13.5%
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China: 10.7%
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Switzerland: 5.3%
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Germany: 4.1%
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Japan: 3.9%
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South Korea: 3.3%
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Ireland: 3.1%
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Taiwan: 3.0%
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Vietnam: 2.9%
The market has reacted with a sharp fall in US stocks, lower yield and the lower dollar (which makes US exports cheaper abroad).
In the video above, I outline the technicals that will now drive the major currencies given the sharp moves.
This article was written by Greg Michalowski at www.forexlive.com.
