Trump’s “Reciprocal Tariffs” Shake Global Markets: What It Means for the Dollar, Gold and the US Markets

Trump’s “Reciprocal Tariffs” Shake Global Markets: What It Means for the Dollar, Gold and the US Markets

President Donald Trump signed an executive order that reignited global trade tensions and rattled financial markets. Dubbed “Liberation Day,” Trump’s announcement introduced sweeping reciprocal tariffs—a strategic move to correct trade imbalances and reassert U.S. manufacturing dominance.

• Trump signs executive order imposing reciprocal tariffs on all imports — minimum 10%, higher for countries with large U.S. trade surpluses
• Market volatility spikes — VIX surges as traders brace for retaliation and economic fallout
• U.S. Dollar weakens — breaks key support as inflation fears rise and investor sentiment sours
• Japanese Yen rallies — tests key resistance as safe-haven flows accelerate
• Gold hits all-time highs — investor flight to safety boosts XAU/USD
• US bonds rise — investors rotate into U.S. Treasuries amid macro uncertainty
• Trader mindset shifts to risk-off — defensive assets favored; USD pairs, gold, and indices repositioned

What Are Reciprocal Tariffs?

At the heart of this executive order is a new baseline 10% tariff on all imports, with steeper rates for nations running significant trade surpluses with the U.S.

Country-Specific Tariff Highlights:

The rationale? “They charge us, we charge them”—a simplified, yet aggressive trade recalibration.

Trump’s Message: A Call for Economic Independence

Trump framed the move as a declaration of economic independence, aiming to:

• Reduce reliance on foreign manufacturing
• Resurrect domestic production and supply chains
• Protect American jobs and intellectual property

“This is Liberation Day,” he said. “We are reclaiming our economy.”

Volatility Index: Surging Amidst Tariff Announcements

With “reciprocal tariffs” now in play, VIX surged to new highs with fears looming over the US markets with its offensive measures against their trade partners.

As tariff’s new policies heavily impacted the markets, we are now entering with a renewed risk-off sentiment over the markets.

Market Reaction: A Surge of Uncertainty and Safe-Haven Flows

The response from global markets was immediate—and intense.

Daily

Dollar declined sharply after the tariff announcement signaling investors’ disinterest on the greenback and fears over the US markets. Dollar dropped and traded through the 103.373 level with renewed uncertainties.

4-Hour

We already outlined this from our last post, https://acy.com/en/market-news/market-analysis/us-dollar-outlook-is-king-dollar-losing-its-crown-j-o-03312025-153334/, that on a technical standpoint, Dollar is not getting enough and sustained traction for an upside.

Bonds on the Rise

US-10 Government Bonds rose with market sentiment over the US is getting sour. Investors flocked to safe-haven assets including government bonds.

Japanese Yen Performing Better vs the US Dollar

Daily

The Japanese Yen is now testing the 760 resistance level after a boost from tariff announcements. The Yen gapped up at Thursday’s trade open following the announcement, reflecting a surge in demand

• A breakout above this level could signal continued strength, particularly if risk sentiment remains fragile
• With investors rotating out of riskier currencies and into defensive assets, the Yen is becoming an attractive alternative to the U.S. Dollar

Gold Surge: Investors’ Flight to Safety

As forecasted, https://acy.com/en/market-news/market-analysis/gold-hits-record-highs-j-o-03312025-171122/, Gold is now trading at new all-time high levels signaling investors’ flock to a much more safer investment.

What Comes Next: Negotiation or Escalation?

The global economy now faces a critical fork in the road. Countries impacted by these tariffs may:

• Retaliate with their own tariffs on U.S. goods
• Challenge the policy via the World Trade Organization
• Push for new regional trade deals that bypass U.S. involvement

In the U.S., the policy will likely face scrutiny in Congress, the media, and the courts.

Actionable Trading Playbook: Navigating Markets After Trump’s Tariffs

The markets are entering a risk-sensitive, geopolitically charged environment following the U.S. reciprocal tariff announcement. Here's a strategic plan on how to approach it from a trader’s mindset — combining macro context with technical setups and risk management.

1. Adopt a Risk-Off Bias (Until Proven Otherwise)

Why?

• Markets are pricing in uncertainty: slower global growth, potential retaliation, and inflation.
• Safe-haven flows are dominating — JPY and CHF outperform.

Action: 

✅ Favor LONGS against the USD on major pairs and Gold.

✅ Favor SHORTS on bet against the US indices.

⛔ Avoid over-leveraging on USD until Fed policy becomes clearer.

2. Macro Checklist Before Each Trade

✅ Is this aligned with the risk tone? (risk-on = favor AUD/GBP/NZD longs, risk-off = shorts)

✅ Is the pair showing technical confirmation (breakout, retest, momentum divergence)?

✅ Are you trading near session opens/high-impact hours?

✅ Are you managing risk:reward properly (minimum 1:2 target)?

✅ Are you aware of news/volatility windows? (NFP, CPI, central banks, retaliation headlines)

3. Stay Flexible – Macro Can Shift Fast

• Monitor for retaliation news from China, EU, Japan — it could accelerate moves or reverse them.
• Watch inflation expectations — if U.S. CPI spikes, it could shift USD sentiment.
• Observe Fed and global central bank tone — any unexpected pivot changes the dynamic.

Final Notes: Think Like a Pro

This is a news-driven market, which means momentum and sentiment may dominate over fundamentals in the short term. Be quick to adapt, stay focused on capital preservation, and only trade when the setup is clear and the narrative supports it.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.