A truck carrying vehicles drives into the United States at the Otay Mesa Port of Entry, on the U.S.-Mexico border on February 1, 2025 in San Diego, California.
Apu Gomes | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Trump tariffs take effect
U.S. President Donald Trump launched a salvo of tariffs on Saturday. Imports from Mexico and Canada will face a 25% duty, while those from China will be subject to a 10% tariff. Energy resources from Canada will face a lower 10% tariff. Canada’s Prime Minister Justin Trudeau announced on the same day retaliatory tariffs of 25% against $155 billion in U.S. goods. Industry leaders in the U.S. have expressed concern over those tariffs.
Effects of Trump’s tariffs
U.S. stock futures tumbled on Monday morning as traders digested the implications of tariffs. Prices of U.S. crude climbed nearly 2% and the international Brent benchmark rose more than 1%. However, analysts think oil prices could fall in the long run if tariffs trigger a global recession. Bitcoin fell around 3.9% to $94,174.61 as of 2:20 p.m. Singapore time, though one strategist thinks a tariff war would be “amazing” for the cryptocurrency.
For stocks, a winning January amid uncertainty
U.S. markets retreated Friday, giving up earlier gains, on news of Trump’s impending tariffs. The S&P 500 lost 0.50%, the Dow Jones Industrial Average slid 0.75% and the Nasdaq Composite fell 0.28%, but all indexes ended January in the green. Asia-Pacific markets suffered losses on Monday. Japan’s Nikkei 225 and South Korea’s Kospi index dropped more than 2% each. Taiwan semiconductor stocks TSMC and Foxconn, which trades as Hon Hai Precision Industry, slumped after a DeepSeek-induced tech sell-off last week.
Factory growth slows in China
China’s factory activity slowed in January, according to the Caixin/S&P Global manufacturing purchasing managers’ index. The seasonally adjusted reading came in at 50.1 for January, lower than December’s 50.5 — which was also the forecast of a Reuters poll. Domestic demand improved, while new export orders fell for a second straight month, according to the survey.
[PRO] Tariffs won’t hit all equally
Blanket tariffs on Canada, Mexico and China mean that no goods imported from those countries will be spared from increased costs. However, these U.S. companies, which have manufacturing chains worldwide or rely heavily on imports, will be dealt the heaviest blow.
The bottom line
U.S. President Donald Trump’s tariffs are no longer a threat but a reality. They cap off a wild January during which a new president entered the White House and a new Chinese artificial intelligence model upended the industry.
Something else that was new in January: the highest-ever closing level for the S&P 500.
But with tariffs now in place and a potential trade war brewing, markets might find it difficult to scale new heights in the near term.
Even Big Tech earnings and the jobs numbers coming out this week, typically market-moving reports, are likely to play second fiddle to policy developments.
Markets are already reacting to the news. Prices of oil and gold — which tend to move upward in times of volatility — have climbed, while bitcoin is trading lower, though it’s unclear if those shifts will be a one-off shock or a sustained trend.
China’s factory activity, which grew at a slower pace in January compared with December, will likely take a hit as U.S. companies attempt to pivot away from Chinese imports.
Trump’s current tariffs may be targeted, but it’s hard to see any country or sector escaping unscathed.
