Citibank's three possible scenarios for the implementation of the 4.2 tariff are worth considering Scenario 1, announcing only reciprocal tariffs: If the Trump administration only announced reciprocal tariffs based on the most favored nation (MFN) simple average tariff gap on April 2, this would be a relatively mild outcome. According to a survey by Nomura Securities, about 25.5% of respondents believe that this situation may occur, with countries such as India, Thailand, and Indonesia being the most affected. In this situation, market reactions may be limited and the US dollar index may not experience significant fluctuations. Scenario 2, reciprocal tariffs plus value-added tax (VAT): If the tariff policy includes VAT, it would be a more aggressive measure that could trigger risk aversion and a strengthening of the US dollar. In this scenario, the MFN tariff gap (including a 19% value-added tax) in Germany is 20.4%, in France it is 21.1%, and in Spain it is 21.8%. The Asian region also faces risks, with Japan at 10.5%, India at 29.5%, and Thailand at 13.0%. This scenario could lead to a 50-100 basis point increase in the US dollar index (DXY) immediately after the announcement, but at the same time, the US dollar may weaken against the Japanese yen and global stock markets may also decline. Asian interest rates may fall, with India and Thailand potentially dropping by 5-7 basis points. Scenario 3, more aggressive tariff policies: In addition to reciprocal tariffs and value-added tax, it may also include industry-specific tariffs. For example, Trump had previously announced a 25% tariff on imported finished cars (potentially affecting Mexico, South Korea, Japan, Canada, and Germany), and hinted at the possibility of tariffs on semiconductor chips and drugs (with South Korea and Singapore being the most affected). In addition, it may not extend the 25% tariff period for Mexico and Canada, or impose tariffs on countries importing Venezuelan oil. In this scenario, the market reaction may be the most intense, and the US dollar index may further strengthen, while the US dollar may fall sharply against the Japanese yen. The following figure shows a mild version and a tough version of the tariff implementation deduction on the 21st// (x.com)/qinbafrank/status/1904040246112825602? S=46&t=k6rimWSEbo2D2TXolYcM-A has a coarser particle size than the one sorted by Citibank, which can be used as a reference.