Washington (AFP) – US President Donald Trump intensified a global trade war Wednesday as he slapped sweeping tariffs on imports from allies and foes alike, sending markets into a tailspin and upending decades-long free trade norms. The EU and China vowed retaliation against the levies, with Australia’s leader saying the new tariffs were “not the act of a friend” and would hurt the close allies’ relationship.
Shortly after Trump’s proclamation, separate tariffs of 25 percent on all foreign-made cars and light trucks went into effect, with auto parts also due to be hit by May 3. Holding up a chart of the sweeping measures in the White House Rose Garden, Trump unveiled particularly stinging tariffs on major trade partners China and the European Union on what he called “Liberation Day.” “This is one of the most important days, in my opinion, in American history,” said Trump. “It’s our declaration of economic independence.”
The tariffs announcement triggered immediate anger around the world, with rival China warning they could “endanger” global economic development. Stock markets looked set for major volatility Thursday, with Tokyo’s Nikkei leading an Asian selloff, collapsing more than four percent, and Hanoi shares tanking more than five percent after Vietnam was targeted with tariffs of 46 percent. 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.
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.
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, and a damaging trade war abroad.
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, which was 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.
EU chief Ursula von der Leyen vowed Europe was “prepared to respond” to the tariffs, calling them a “major blow to the world economy.” 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 said it still wanted to “mitigate” the tariffs. 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. The 10 percent “baseline tariff” kicks in on Saturday, while the elevated rates for those the White House deemed “the worst offenders” will take effect on April 9.
© 2024 AFP
