President Donald Trump’s sweeping new tariff regime, imposing significant levies on imports from virtually every major trading partner, has triggered a wave of global market turmoil and sparked fears of an escalating trade war. The unprecedented move, described as the most significant upheaval of global trade norms since World War II, has elicited swift and dramatic reactions from nations worldwide.
Key Developments:
- Universal Tariffs:
- Trump’s policy introduces a baseline 10% tariff on all goods entering the United States, effective April 5th.
- “Reciprocal tariffs,” reaching over 50% for some countries, will commence on April 9th.
- Rationale:
- The US president claims the tariffs are aimed at rectifying decades of “unfair trade practices” that have disadvantaged American businesses.
- Global Market Impact:
- Asian markets plunged on Thursday morning, reflecting the widespread anxiety surrounding the new tariffs.
- Global supply chains are expected to be significantly disrupted.
Country-by-Country Reactions:
- China:
- Facing tariffs exceeding 50%, China’s commerce ministry demanded the immediate cancellation of the levies, warning of damage to global economic development and US interests.
- China is considering countermeasures, including reciprocal tariffs, currency devaluation, and restrictions on rare earth exports.
- The closing of the “de minimus” loophole will greatly affect Chinese e-commerce companies.
- UK:
- Relief was expressed at the 10% tariff, lower than the anticipated 20%.
- However, the tariffs are expected to negatively impact UK growth forecasts and potentially lead to job losses.
- South Korea:
- The acting president vowed an “all-out” response to the 25% tariffs, particularly impacting the auto industry.
- Hyundai and GM Korea are expected to see a decline in US exports.
- Japan:
- Prime Minister Shigeru Ishiba questioned the logic of uniform tariffs, given Japan’s significant investment in the US.
- Japanese automakers are bracing for a slump in exports, with Goldman Sachs predicting a “significant” impact.
- India:
- India faces a 26% “discounted reciprocal tariff,” with electronics, gems, jewelry, textiles, and IT sectors heavily impacted.
- India is considering slashing tariffs on US imports to appease the US.
- Pharmaceuticals have been exempted from the tariffs.
- Australia:
- While facing only the 10% blanket tariff, Australia criticized the move as a “hostile act,” but will not retaliate.
- Critical minerals are exempt from the tariff.
- New Zealand:
- Expressed concern over the 10% tariff and questioned the US calculation of New Zealand’s tariffs.
- The tariff could result in a significant financial burden for New Zealand exporters.
- Canada:
- Exempted from the latest tariffs but faces existing levies on steel, aluminum, and automobiles.
- Canada pledged to “fight these tariffs with countermeasures.”
- Mexico:
- Exempted from the new tariffs but faces previous levies.
- Mexico announced it would pursue a “comprehensive program” rather than retaliatory tariffs.
- Taiwan:
- The cabinet deemed the 32% tariff “very unreasonable,” predicting a potential 3.8% GDP contraction.
- Taiwan is seeking negotiations with the US and considering measures to balance trade.
- TSMC has been exempted due to a 100 billion dollar investment in the US.
- Thailand:
- Thailand expressed concern about the negative effects on US consumers.
- Thailand is looking to diversify markets.
- Thailand is seeking dialogue with the US.
