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Dollar Strengthens as Trump Imposes 25% Tariffs on Colombia, Set to Escalate to 50% by February 1

Jan 28, 2025, 10:42 AM

The U.S. dollar has strengthened globally following President Donald Trump's announcement of a 25% emergency tariff on all Colombian imports, escalating trade tensions. The tariffs, which are set to escalate to 50% within a week, were imposed after Colombia refused to accept deported migrants from the United States. The dollar gained 0.3% against major currencies like the euro and the Australian dollar, while the Bloomberg Dollar Spot Index rose 0.5%. Emerging market currencies, including the Mexican peso, fell, with the peso dropping over 1% as the tariff news impacted sentiment toward Latin American assets. Trump also hinted at broader tariff measures, including potential universal tariffs on goods like steel and semiconductor chips, with rates possibly exceeding 2.5%. The tariff threats have fueled concerns over inflation and sustained high U.S. interest rates, with Treasury yields rising to 4.56%. Investors are closely watching the February 1 deadline for further developments.