Washington (AFP) – President Donald Trump goaded China on Friday after the US’s chief economic rival retaliated against his tariffs, and he dismissed falling stock markets over the growing global trade war, touting it as a chance to “get rich.”
“China played it wrong, they panicked — the one thing they cannot afford to do!” Trump posted on Truth Social, writing the message in his trademark all-caps. For a second day, markets plunged, wiping vast sums off investment and retirement portfolios alike. US Federal Reserve Chairman Jerome Powell warned the tariffs were likely to spur “higher inflation and lower growth.” Wall Street saw prolonged selloffs, both the Dow Jones and S&P 500 losing close to four percent. Frankfurt and London sank more than four percent, while Tokyo’s Nikkei closed 2.8 percent down.
Trump, who unveiled his barrage of import duties against dozens of countries Wednesday, was unrepentant, posting that “my policies will never change.” “This is a great time to get rich,” he wrote. The 78-year-old Republican, who was spending a long weekend golfing at his course in Palm Beach, Florida, is banking on the theory that the might of the world’s biggest economy will force foreign companies to manufacture on US soil, rather than continue to import goods.
However, China responded by announcing its own new 34 percent tariffs on US imports starting April 10. Beijing said it would sue the United States at the World Trade Organization and also restrict export of rare earth elements used in high-end medical and electronics technology. Other big US trading partners have held back as they digest the unfolding international standoff and fears of recession. EU trade chief Maros Sefcovic said the EU, which Trump hit with a 20 percent tariff, will act in “a calm, carefully phased, unified way” and allow time for talks. However, he also warned the bloc “won’t stand idly by, should we be unable to reach a fair deal.”
France and Germany have said the 27-nation EU could respond by imposing a tax on US tech companies. Economy Minister Eric Lombard urged French companies to show “patriotism” after President Emmanuel Macron argued it would send the wrong message if they pressed ahead with investments in the United States. Lombard said the EU’s retaliation would not necessarily involve tit-for-tat tariffs and could use other tools, pointing to data exchange and taxes instead.
In Tokyo, Prime Minister Shigeru Ishiba called for a “calm-headed” approach after Trump slapped 24 percent tariffs on Japanese-made goods. Trump said he’d had a “very productive” call with Vietnam’s top leader after the southeast Asian manufacturing hub was hit with extraordinary 46 percent US duties.
Separate US tariffs of 25 percent on all foreign-made cars went into effect this week, and Canada swiftly responded with a similar levy on US imports. Stellantis — the owner of Jeep, Chrysler and Fiat — paused production at some Canadian and Mexican assembly plants. Japanese carmaker Nissan said on Friday it would revise plans to reduce production in the United States. The company also said it would stop selling two vehicle models on the US market that are made in Mexico. Sweden’s Volvo Cars, owned by China’s Geely, said it would increase its production of vehicles in the United States and probably produce an additional model there.
Powell’s comments Friday reflected growing concern that the trade war shockwaves will extend deep into the US economy. “It is now becoming clear that the tariff increases will be significantly larger than expected,” Powell said in a speech. “The same is likely to be true of the economic effects.” Minutes before Powell suggested the Fed will continue to hold off from cutting its benchmark lending rate, Trump pressured him to do so. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” he posted — once again defying the longstanding custom in which the White House respects the central bank’s independence. In a more concrete sign of how tariffs are impacting trade, Nintendo announced it was delaying preorders of its hotly anticipated Switch 2 gaming console while it assesses “evolving” conditions.
© 2024 AFP
