How do tariffs affect emerging market currencies?

Tariffs can significantly impact emerging market currencies by disrupting trade and investment flows. When a country faces tariffs from a major economy, such as the US, the cost of exports can rise, making the country’s products less competitive on the global stage. As a result, demand for that country’s currency tends to decrease, causing its value to fall. Additionally, tariffs can trigger inflationary pressures as the cost of imported goods increases, further weakening the currency. Emerging markets, which are often heavily reliant on exports and foreign investment, are particularly vulnerable to such shifts. The US dollar, in contrast, often strengthens during such times as investors seek safer assets in the face of trade uncertainties. For a deeper understanding of the ongoing effects of tariffs and their global consequences, you can read more at https://pushinnews.blogspot.com/2025/01/trumps-colombia-tariffs-spark-dollar.html

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