​EBC Markets Briefing | US new tariffs may tip the scale of forex markets

Washington is implementing a new global tariff at 10% rather than the 15% announced at the weekend after the Supreme Court unfavourable ruling, according to a notice from the US customs agency.

The decision also made ‌more than $175 billion in US Treasury revenue generated by the IEEPA tariffs subject to potential refunds, based on an estimate by Penn-Wharton Budget Model economists.

US goods imports continued to outpace its exports last year, sending trade deficit to a new high despite sweeping tariffs, as business investment in AI increased imports of computer parts and equipment.

The Trump administration said it will take time for its efforts to pay off. Treasury yields will likely remain at high levels as its fiscal stimulus package needs to be funded by increased issuance.

The International Chamber of Commerce noted that many businesses will benefit given the "significant strain" on balance sheets in recent months. However, it is yet to early to jump to a conclusion.

"It appears the US has lost the ability to enforce those rates, and any prior renegotiated rates stemming … are now replaced by the uniform 10% rate under Section 122," said Claudio Galimberti, chief economist at Rystad Energy.

According to Morgan Stanley, the new tariffs lessen the economic burden of most Asian countries, and the biggest winner is China. That means yuan and China A50 Index could have more to run.

EU bewilderment

A EU assessment found that new tariff policy will increase levies on some of the bloc's exports, including cheese and some agricultural products, above the level permitted in their trade agreement.

Some products including butter, plastics, textiles and chemicals would face levies above the 15% ceiling. The European Commission has said any increase in tariffs will be unacceptable.

The European Parliament's trade chief Bernd Lang has proposed freezing the ratification process of the deal with the US until he has "a comprehensive legal assessment and clear commitments from the US".

US Trade Representative Jamieson Greer defended Trump's act, saying that the trade policy has not changed fundamentally. Tensions were already growing amid a scramble for Greenland.

Denmark on Sunday rejected Trump's offer to send a naval hospital ship to the Arctic island. Jens-Frederik Nielsen, the premier of Greenland, claimed no framework in place last month.

Data from Germany in the coming days will shed light on whether Europe's largest economy is on the cusp of a meaningful revival. Manufacturing PMI breached 50 in January – the first time since June 2022.

Even the global tariff rises to 15%, there will be limited practical effects on Swiss exports given the exceptions for pharmaceuticals and gold. Therefor we see downside risks to the euro against the Swiss franc.

Headaches in North America

South America appear to be comparatively well-positioned as the region's main commodity exports—such as raw copper—have largely been spared to fend off higher input costs for the US manufacturing industry.

Canada and Mexico retains preferential access under USMCA. In 2025, the US registered goods trade deficits with Mexico and Canada, but an overall goods trade surplus with South America.

Mexico GDP grew 0.8% in 2025, extending its slowdown streak, with a contraction in industrial activity. Analysts at BofA Securities pointed to a "chronic lack of growth", raising concerns about medium- term trajectory.

Ongoing violence from criminal groups in the country, which disrupted travel and attacked businesses during the weekend, could also create headwinds in that tourism represents approximately 10% of the economy.

Even so, the Mexican peso is hovering around its highest level in over a year, driven by carry trades and accelerating inflation. But a pullback may occur soon after underlying weaknesses are priced in.

Elsewhere Canada are under the strains of fiercer energy export competition. Venezuelan oil exports rose to some 800,000 bpd in January, from 498,000 bpd in December.

The country lost 2,500 jobs in January, weaker than consensus expectations for a 5,000 increase. Though the report can hardly move the needle for the BOC, it dims the outlook for the Canadian dollar.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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