U.S. President Donald Trump imposed a 25% tariff on imports from Canada and Mexico and a 10% tariff on imports from China last Saturday, stating that the measures were necessary to combat illegal immigration and drug trafficking.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum responded by announcing tariff increases on U.S. goods. Meanwhile, China's Ministry of Foreign Affairs stated that it would file a complaint against Trump’s tariffs with the World Trade Organization (WTO).

As a result, investors turned to selling off risky assets due to the tariff hikes and shifted towards holding safe-haven assets like the U.S. dollar (USD) instead of gold.

Source: Fxstreet