Trade War Escalates, Gold Hits Another Record High

Trade War Escalates, Gold Hits Another Record High

Trade tensions surged as Trump threatened a 200% tariff on European Union alcohol imports, further escalating conflicts with the EU and Canada, both of which had already imposed retaliatory tariffs in response to U.S. steel and aluminum duties.

In response, the EU and Canada announced immediate counter-tariffs, while other nations—including Australia, the UK, Japan, and Brazil—criticized the move but have yet to introduce their own measures.

Trade War Concerns: More Retaliation Ahead?

In February, Trump directed his administration to develop a reciprocal tariff plan, considering trade balances, existing tariffs, and value-added taxes. Commerce Secretary Lutnick stated that a proposal would be finalized by April 1, 2025.

Meanwhile, economists warn that Trump’s policies could expose the U.S. to severe retaliatory tariffs, potentially harming trade, increasing economic uncertainty, and driving up inflation.

Trump: “I’m not going to bend at all”

Trump responded with that when asked about his tariff plans during an Oval office meeting with NATO Secretary General Mark Rutt.

“I’m not going to bend at all” and “We’ve been ripped off for years, and we’re not going to be ripped off anymore,” he said.

Trump specifically said he would not change his mind about enacting sweeping “reciprocal tariffs” on other countries that put up trade barriers to U.S. goods. The White House has said those tariffs are set to take effect April 2.

With the reciprocal tariff plan set to be finalized on April, trade tensions could escalate further, triggering global retaliatory measures. This could reignite a large-scale trade war, potentially larger to what occurred during Trump’s first term, where it mostly involved only China.

The ongoing stock market downturn reflects growing investor anxiety, as markets react negatively to escalating trade disputes.

Gold Surges to Another Record High

Gold surged to a new all-time high yesterday, reaching $2,990 and edging closer to the psychological $3,000 level. The escalating trade tensions have driven investors toward safe-haven assets, fueling a strong bullish move in gold.

(XAUUSD, 4-H Chart; Source: Trading View)

From a technical perspective, the breakout suggests further upside momentum, with $3,000 as the next key resistance. Meanwhile, using the Fibonacci extension as a reference, the next major resistance is likely around $3,030.

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