U.S. Dollar Flat as Trump Announces Tariffs on China
The U.S. dollar was flat against other currencies on Tuesday as the White House imposed fresh tariffs on China.
U.S. President Donald Trump announced on Monday that the U.S. will put 10% tariffs on $200 billion in Chinese goods, which will go up to 25% at the end of the year.
Trump added that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."
"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly," he said in the statement.
"But, so far, China has been unwilling to change its practices."
China has said it will retaliate against the new tariffs. The U.S. had extended an invitation to China to discuss trade later this month but China is likely to cancel.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was flat at 94.09 as of 5:05 AM ET (9:05 GMT).
Elsewhere, the dollar rose against the safe-haven yen, with USD/JPY up 0.06% to 111.95. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The Chinese yuan was lower after the news, falling to three-week low. USD/CNH rose 0.08% to 6.8756, not far from a session high of 6.8921.
Meanwhile the euro and sterling were flat. The euro increased 0.03% to 1.1685, while the pound fell 0.11% to 1.3136. The Australian dollar was higher, with AUD/USD up 0.39% to 0.7219 while NZD/USD rose 0.23% to 0.6593