Trump raises tariffs to 15%. How the trade war affects trading

Largest tax increase since 1993

After the Supreme Court ruling on February 20 that IEEPA does not authorize the president to impose tariffs, the Trump administration imposed 10% global tariffs under Section 122, with plans to increase to 15%.

Market impact

S&P 500: Dropped over 1% in reaction to the announcement. Most exposed sectors are technology and consumer goods.

Dollar: DXY recorded its steepest early-year decline since the 2008 financial crisis - down 4.2% by March 7.

EURUSD: The pair gained on dollar weakness, testing the 1.09 level.

Gold: Continues to rally as a safe haven - geopolitical uncertainty plus tariffs is a perfect mix.

Strategy for traders

In a trade war environment, key considerations are:

1. Watch the economic calendar closely - new tariffs can be announced without warning
2. Reduce position sizes before key announcements
3. Focus on wide-spread currency pairs (USDCNH, USDMXN)
4. Safe havens: gold, Swiss franc, Japanese yen

For prop trading accounts, risk control is especially important. Extended drawdowns can build quickly on sharp market reactions to new tariff announcements.