Gold Surges, Dollar Tumbles on Trump's Fresh Tariff Threats

Gold that was hovering around $2,700 per ounce jumped over $50 in a single day. Meanwhile, the dollar crashed more than 2% against major currencies. The culprit? Donald Trump's latest tariff bombshell.

One Tweet, Market Chaos

Trump announced over the weekend that he'd impose additional tariffs from "day one" of his presidency. The targets: 10% extra on Chinese goods, and a whopping 25% on products from Mexico and Canada.

Markets didn't wait for clarification. JPMorgan analysts called it "more aggressive than expected," warning of "Trade War 2.0." The reaction was swift and brutal.

Flight to Safety

Investors did what they always do when uncertainty strikes—they ran to gold. The precious metal became the day's biggest winner, while the dollar got hammered. The Mexican peso crashed over 4%, and the Canadian dollar fell 2.5%.

But here's what's interesting: this wasn't just about direct targets. Even currencies from countries not mentioned in Trump's threat—like the South Korean won—felt the pressure. Global supply chains mean everyone's connected.

Winners and Losers Emerge

The tariff threat created clear winners and losers overnight.

Winners: Gold investors are celebrating. Those who bought gold ETFs saw returns of over 2% in a single day. U.S. domestic-focused companies also got a boost, seen as safer bets in a protectionist world.

Losers: Export-heavy companies took a beating. Apple and Tesla, with significant Chinese manufacturing, face potential cost increases. European automakers with Mexican plants are scrambling to assess the damage.

The Real Cost Question

Here's what Wall Street's quietly discussing: who actually pays for tariffs? Economic theory says it's consumers, through higher prices. But Trump's team argues it'll force companies to relocate production to the U.S.

Walmart and Target executives are already running the numbers. A 25% tariff on Mexican goods could mean everything from avocados to auto parts gets more expensive. The math is simple, but the politics are complex.

Global Supply Chains Under Threat

The ripple effects extend far beyond the named countries. South Korea, despite not being directly targeted, could see its $180 billion in annual trade with China disrupted. German automakers with Mexican plants face tough choices.

Hyundai, which produces vehicles in Mexico for the U.S. market, might need to completely rethink its North American strategy. The same goes for countless other companies that built their operations around NAFTA-era trade rules.