Washington (AFP) – US President Donald Trump geared up to unveil sweeping new “Liberation Day” tariffs on Wednesday in a move that threatens to ignite a devastating global trade war. Key US trading partners including the European Union and Britain said they were preparing their responses to Trump’s escalation, as nervous markets fell in Europe and America. Trump will unveil the levies in a grand ceremony with his cabinet members in the White House Rose Garden — just as Wall Street stocks close at 4:00 pm (2000 GMT).
“IT’S LIBERATION DAY IN AMERICA!” Trump posted a one-liner on his Truth Social platform early Wednesday. The 78-year-old has promised so-called reciprocal tariffs on friends and foes alike if they target the world’s largest economy, saying the levies will stop the United States from being “ripped off.” But Trump has kept the world guessing until the last minute about the scale and scope, with the White House saying he was still “perfecting” them with just hours to go. Reports say he could either hit countries with tit-for-tat tariffs, impose blanket 20 percent tariffs — or, more probably, give some countries preferential treatment depending on their deficits. The Republican president said in his last public appearance Monday that he would be “very kind” but gave little away.
Critics say US businesses and consumers could bear the burden if importers pass on the cost, adding that the policy could increase risks of a recession. “If this trade war continues through Labor Day (on September 1), the US economy will likely suffer a recession this year,” Mark Zandi, chief economist of Moody’s Analytics, told AFP. Trump’s long-awaited announcement is also causing global turmoil, with stock markets jittery for days and countries in the crosshairs scrambling to decide how to react. European Central Bank President Christine Lagarde warned Wednesday that whatever steps other countries take, “it will be negative anyway the world over.”
America’s neighbors, Mexico and Canada, whose economies are closely linked with the United States, are those that could suffer the most from a bruising trade war. “I understand that it’s a game of tug-of-war,” truck driver Alejandro Espinoza told AFP as he waited in a queue to cross the Mexican-US border. “But unfortunately, we’re the ones who pay in the end.”
Major economies have, however, vowed retribution. The European Union will react to new Trump tariffs “before the end of April,” said a French government spokeswoman. The 27-nation bloc’s initial salvo would counter US actions on steel and aluminum, followed by sector-by-sector measures. British Prime Minister Keir Starmer, who has made intense but so far fruitless efforts to win a carve-out from Trump, said a “trade war is in nobody’s interests.” “We have prepared for all eventualities — and we will rule nothing out,” he told parliament.
Germany warned Wednesday that trade wars hurt “both sides.” Canada’s Prime Minister Mark Carney, who goes into elections later this month dominated by tensions with Trump, said his country would be “very deliberate” in its response. The White House said Trump’s tariffs would come into effect “immediately” after Wednesday’s announcement, effectively ruling out delays for negotiations. Sweeping auto tariffs of 25 percent are due to take effect April 3, after Trump earlier imposed duties on steel and aluminum imports and goods from China.
But Trump has wobbled on several other tariff announcements since returning to office in January, blinking at the last minute with allies such as Canada and Mexico. The billionaire has had a long love affair with tariffs, insisting in the face of experts that they are a cure-all for America’s trade imbalances and economic ills. Trump insists the levies will bring about a “rebirth” of America’s hollowed-out manufacturing capacity, and says companies can avoid tariffs by moving to the United States. The tariffs meanwhile underscore the growing and profound gulf between Trump’s America and many of its closest allies, not only on trade but on security, defense, and almost everything else.
© 2024 AFP
