Stock markets were weaker on Tuesday after the latest round of tariffs between China and the US.
SPX 500 – Daily Chart
The SPX 500 has hit some clear resistance around the 6,100 level and could look to retest the uptrend support line. A move above 6,100 can start another leg higher with a real catalyst.
The tariffs with China are an issue for the world economy and now Europe is joining the fray. President Donald Trump signed an order on Monday to impose global tariffs of 25% on all steel and aluminum imports. That would be good for domestic players but would hurt allies like Canada and Mexico.
The EU’s Ursula Von der Leyen said tariffs were taxes and they were “bad for business, worse for consumers,” and warned that the “unjustified tariffs on the EU will not go unanswered—they will trigger firm and proportionate countermeasures”.
The European Commission also issued a statement against the measures, saying: “The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures”.
“By imposing tariffs, the US would be taxing its own citizens, raising costs for business, and fuelling inflation,” they added.
Stock market investors are now stepping back to assess the potential for a global recession. The Australian Prime Minister Anthony Albanese also told parliament that he has booked an urgent call with Trump for a special exemption from tariffs.
Australia is hoping that its reported exports of 223,000 tonnes of steel, and 83,000 tonnes of aluminum last year, can gain some sway in terms of US reliance.
China’s 10% additional tariff on vehicles with larger engines imported from the US took effect on Monday. Exports are small compared to the number of cars produced but the mood is leading to investor fears over a variety of investment sectors.
