President Donald Trump ‘s move to slap a 10% tariff on most goods imported to the United States, as well as much higher levies on dozens of rivals and allies alike, has intensified a global trade war that threatens to stoke inflation and stall growth.
The sweeping penalties announced against the serene backdrop of the White House Rose Garden on Wednesday immediately unleashed turbulence across world markets and drew condemnation from other leaders now facing the end of decades of trade liberalization that have shaped the global order.
As markets across Asia processed the information on Thursday, Japan’s Nikkei share index plummeted to its lowest point in eight months. Meanwhile, U.S. and European stock futures also took a sharp downturn as investors sought refuge in safer assets like bonds and gold.
China, ranked as the globe's second-largest economy, was hit with an additional 34% tariff on top of the existing 20%. Trump Previously enforced, promised retaliatory actions, apparently not paying much attention to a caution from U.S. Treasury Head Scott Bessent that these steps could result in an increase in tensions.
Close partners such as Japan and the European Union did not escape these measures, encountering tariff rates of 24% and 20%, respectively. The basic rate was set at 10%. tariffs come into force on April 5 and the increased reciprocal rates on April 9.
The EU leader, Ursula von der Leyen, characterized the situation as follows: tariffs It dealt a significant blow to the global economy and stated that the 27-nation group was ready to take retaliatory actions if negotiations with Washington did not succeed.
"The repercussions will be severe for millions of individuals worldwide," she stated.
The “reciprocal” tariffs , Trump It was stated that these measures were responses to duties and various non-tariff obstacles imposed on American products. He contended that the additional taxes would lead to an increase in domestic manufacturing employment.
For many years, our nation has faced theft, destruction, violence, and exploitation at the hands of countries nearby and afar, from allies as well as adversaries, Trump said.
External analysts have cautioned that tariffs might decelerate the worldwide economy, boost the chance of a downturn, and elevate living expenses for the typical American household by several thousand dollars.
The two biggest U.S. trade allies, Canada and Mexico, already encounter a rate of 25%. tariffs On numerous products, they won’t encounter extra charges following Wednesday’s announcement.
Even several of his Republican colleagues have voiced worry over this situation. Trump ‘s aggressive trade policy.
Hours after Wednesday's announcement, the Senate approved the legislation with a vote of 51-48 to end the measure in question. Trump ‘s Canadian tariffs , with some Republicans diverging from the president. The passage in the GOP-led U.S. House of Representatives, nonetheless, was anticipated to be improbable.
Trump The chief economist of 's, Stephen Miran, informed Fox Business on Wednesday the tariffs It would ultimately benefit the U.S. over time, despite causing some short-term disruptions.
“Are there going to be short-term bumps as a result? Absolutely,” Miran, the chairman of Trump ‘s Council of Economic Advisors, told the network’s “Kudlow” program.
The reciprocal tariffs These exemptions do not apply to specific items such as copper, pharmaceuticals, semiconductors, timber, gold, energy sources, and "specific minerals that cannot be sourced from within the United States," as stated in a White House document.
Following his remarks, Trump Additionally, an executive action was taken to shut down a loophole that allowed low-value shipments – worth $800 or less each – to enter the country without duties from China. This rule also applies to items coming from Hong Kong and will come into force on May 2nd. According to the White House, this decision aims to reduce the influx of fentanyl into the United States.
U.S. anti-narcotics authorities claim that Chinese chemical manufacturers are the primary providers of raw materials bought by Mexican cartels for producing lethal drugs. According to a Reuters investigation from last year, smugglers frequently transport these chemicals via the United States by taking advantage of the de minimis loophole. China has consistently rejected responsibility for this issue.
Trump is also planning other tariffs Targeting semiconductors, pharmaceuticals, as well as possibly critical minerals, according to an official statement.
earlier in the day, officials from the administration mentioned a different set of tariffs on auto imports that Trump mentioned last week will come into play beginning on Thursday.
Trump earlier applied 25% tariffs on steel and aluminum, which were then expanded to encompass almost $150 billion worth of downstream goods.
Concerns over tariffs have already hindered manufacturing activities worldwide, whilst simultaneously boosting car and other import product sales, as buyers hasten their purchases fearing future price increases.
U.S. Representative Gregory Meeks, who leads the Democrats on the House Foreign Affairs Committee, announced that he will propose a bill to terminate the tariffs However, such legislation has minimal chances of being passed by the Congress controlled by Republicans.
“ Trump simply impose the biggest regressive tax increase in recent American history on them – huge tariffs On every import, his careless policies are not just destabilizing markets; they will also have a greater negative impact on working families," Meeks stated.