Paris (AFP) – Countries vowed on Thursday to hit back at US President Donald Trump’s global tariffs onslaught, but left the door open to negotiations as markets tumbled over fears his trade war would damage the world economy. Trump spared almost no nation on his “Liberation Day,” hitting friends and foes alike and reserving some of the harshest tariffs for major trade partners, including the European Union and China. Separate tariffs of 25 percent on all foreign-made cars and light trucks also went into effect, with auto parts due to be hit by May 3.
Holding up a chart of the sweeping measures in the White House Rose Garden on Wednesday, Trump said this was “one of the most important days, in my opinion, in American history.” “It’s our declaration of economic independence,” he said. The tariffs announcement triggered immediate anger around the world, with rival China warning they could “endanger” global economic development. EU chief Ursula von der Leyen vowed Europe was “prepared to respond” to the tariffs, calling them a “major blow to the world economy.” But the 27-nation bloc and other countries also said they were ready to negotiate.
The tariff announcements sent a shockwave through stock markets. In Asia, Tokyo’s Nikkei closed 2.8 percent lower while Hanoi shares dropped more than seven percent after Vietnam was targeted with tariffs of 46 percent. European equities opened in the red, with Frankfurt the biggest faller at 2.2 percent, while US futures plummeted and safe haven gold hit a new record as investors took fright. Trump reserved some of the heaviest blows for what he called “nations that treat us badly.” That included an additional 34 percent on goods from China — bringing the new added tariff rate there to 54 percent. Beijing swiftly vowed countermeasures and called for dialogue, warning the levies would “seriously harm” those involved.
The figure for the European Union was 20 percent, and 24 percent on Japan, whose trade minister called the tariffs “extremely regrettable.” For the rest, Trump said he would impose a “baseline” tariff of 10 percent, including another key ally, Britain, which will come into effect on Saturday while the higher duties will kick in on April 9. The 78-year-old Republican brushed off fears of turmoil, insisting that the tariffs would restore the US economy to a lost “Golden Age.” “For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said.
The French government warned that the EU could target US tech firms with taxes on online services. “We have a whole range of tools and we are ready for this trade war,” French government spokeswoman Sophie Primas told broadcaster RTL, adding that Trump “thinks he is the master of the world.” But Germany, a major exporter of cars to the US, said it backed a “negotiated solution.” Italian Prime Minister Giorgia Meloni, a close Trump ally, said the levies on the EU were “wrong” but pledged to seek a deal.
Britain escaped relatively lightly after a diplomatic offensive, but Prime Minister Keir Starmer warned there would still be an “economic impact” from the 10 percent tariff on UK goods. Canada and Mexico are not affected by the new levies as Trump has already punished them for what he says is their failure to stymie drug trafficking and illegal immigration. Canadian Prime Minister Mark Carney vowed to “fight” the existing levies. Trump’s announcement is the culmination of a long love affair with tariffs, which he has seen for decades as a cure-all for America’s trade imbalances and economic ills.
A hand-picked audience of cabinet members, as well as workers in hard hats from industries including steel, oil, and gas, whooped and cheered as Trump promised tariffs would “make America wealthy again.” Trump labeled Wednesday’s tariffs “reciprocal,” but many experts say his administration’s estimates for levies placed on US imports by other countries are wildly exaggerated. The US president had telegraphed the move for weeks, sparking fears of a recession at home as costs are passed on to US consumers. US Treasury Secretary Scott Bessent warned against countermeasures, saying on Fox News: “If you retaliate, there will be escalation.”
Some of the worst-hit trading partners were in Asia, including 49 percent for Cambodia, 46 percent for Vietnam, and 44 percent for military-ruled Myanmar, recently hit by a devastating earthquake. Russia was not affected because it is already facing sanctions over the Ukraine war “which preclude any meaningful trade,” a White House official said. Certain goods like copper, pharmaceuticals, semiconductors, lumber, and gold will not be subject to the tariffs, according to the White House.
© 2024 AFP
