(Bloomberg) -- The dollar advanced after President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, upending recent macro bets on more measured economic plans from the next US administration.

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The Bloomberg Dollar Spot Index was up 0.4% after earlier climbing as much as 0.7% on Tuesday. Late on Monday, the Canadian dollar fell as much as 1.4% to 1.4178 against the US currency, its weakest mark since April 2020, while the Mexican peso plunged more than 2%. China’s offshore yuan fell as much as 0.4%. In response, the People’s Bank of China supported the currency by setting the daily fixing stronger than forecast.

“We’re seeing the use of economic warfare instruments to achieve geopolitical goals,” said Karl Schamotta, chief market strategist at Corpay in Toronto. “At one point markets were not taking Trump seriously or literally, and we’re beginning to transition out of that.”

Trump is said to have selected Kevin Hassett on Tuesday to head the National Economic Council, according to people familiar with the matter. Hassett, who would assume a role with wide remit over fiscal and trade policy, was the chair of the Council of Economic Advisers during Trump’s first term and a vocal supporter of the administration’s trade wars.

Volatility across major currencies spiked following Trump’s tariffs announcement, with traders focused on the loonie and Mexican peso in particular. One-month risk-reversal options — a gauge of market sentiment that measures the cost of buying rather than selling a currency — are now the most bearish for the Canadian dollar in two years.

In posts to his Truth Social network, Trump said he would put a 25% tariff on “ALL products” coming from Mexico and Canada, along with an additional 10% tariff on Chinese goods, measures he argued would deter migrants and drugs crossing into the US. The United States-Mexico-Canada Agreement, signed during the first Trump administration, currently establishes duty-free trade across an array of industries.

Tim Baker, a macro strategist at Deutsche Bank in New York, said Trump threatening tariffs “to get a change from other countries in the near-term” could “add to volatility and add to uncertainty in the markets.”