In the run up to the election Trump, who described tariffs as "the most beautiful word in the dictionary," vowed hikes as high as 60 percent on Chinese goods, saying this would not only protect domestic industries but serve as critical tax revenue. Economists have pointed out such a move would raise costs for American consumers.

The dollar's price action has largely been driven by two main catalysts: Trump's election and the subsequent Republican sweep, along with the recalibration of future Fed easing in the face of strong economic data.

President Donald Trump has repeatedly threatened to dramatically expand tariffs. It’s a move that could affect trillions of dollars in trade and reshape prices for everything from cars to medication — while potentially straining relationships with key U.S. trading partners.

The Trump administration is discussing a 10% punitive duty on Chinese imports. Trump said the EU also has troubling trade surpluses with the United States.