Disinflation may be taking hold, yet prices in services across France and the Eurozone continue to rise rapidly. Meanwhile, the United States is ramping up its trade strategies with plans for additional "reciprocal tariff" packages on several countries, including the UK and the European Union. These developments unfold amid President Donald Trump's announcement of new tariffs on social media.
President Trump revealed that the US will enforce a 25% tariff on Mexican and Canadian goods starting March 4, moved up from the original date of April 2. This decision comes alongside plans to impose an additional 10% tariff on Chinese imports. The move is part of the administration's broader agenda to secure more balanced trade relations, particularly with the UK, according to an official from the Trump administration.
The tariffs have had a ripple effect on financial markets. Bitcoin (BTC) experienced a correction due to the tariff news and a decline in institutional demand. However, Bitcoin showed resilience, recovering slightly to trade around $86,000 after a significant drop earlier in the week. Similarly, the GBP/USD currency pair faced volatility, hitting two-day lows in the 1.2630 zone on Thursday.
In France, inflation may have eased in February, attributed to a reduction in regulated electricity prices. Despite this potential relief, overall price pressures in services remain pronounced. The Eurozone is witnessing similar trends, where disinflation contrasts with persistent service sector inflation.
The upcoming tariffs are part of a strategic move by President Trump to address trade imbalances. The implementation of these tariffs is anticipated to affect multiple sectors and trading partners, with particular focus on achieving equal trade terms with the UK.
As March 4 approaches, market participants are keenly observing potential comments from Federal Reserve policymakers and President Trump, which could further influence market dynamics. The situation remains fluid, with stakeholders closely monitoring any shifts in policy direction or economic indicators.