Washington (AFP) – Wall Street led a global markets bloodbath Thursday as countries around the world reeled from President Donald Trump’s trade war, while the White House insisted the US economy will emerge victorious. The Dow Jones dropped more than three percent and the S&P 500 plummeted more than four percent. The Nasdaq toppled more than five percent. Shock waves also tore through markets in Asia and Europe in the wake of Trump’s Wednesday announcement, while foreign leaders signaled readiness to negotiate but also threatened counter-tariffs.
Trump slapped 10 percent import duties on all nations and far higher levies on imports from dozens of specific countries — including top trade partners China and the European Union. Separate tariffs of 25 percent on all foreign-made cars also went into effect, and Canada swiftly responded with a similar levy on US imports. In a sign of the real-world impacts expected to become common, Stellantis — the owner of Jeep, Chrysler, and Fiat — paused production at some Canadian and Mexican assembly plants.
Trump dismissed the turmoil, insisting to reporters as he left for a weekend at his Florida golf resorts, that stocks will “boom.”
– ‘Trust Donald Trump’ –
Trump, 78, says he wants to make the United States free from reliance on foreign manufacturers in a massive economic reshaping. He likened his trade policy declaration to a painful medical procedure. “THE OPERATION IS OVER! THE PATIENT LIVED,” he posted on his Truth Social app, with his trademark use of all-caps. “THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE.”
Amid howls of protest abroad and from even some of Trump’s Republicans, Commerce Secretary Howard Lutnick called for patience. “Let Donald Trump run the global economy. He knows what he’s doing,” he said on CNN. “You’ve got to trust Donald Trump in the White House.”
But China demanded that the tariffs be immediately canceled and vowed countermeasures, while France and Germany warned that the EU could hit back at US tech firms. French President Emmanuel Macron called for suspending investment in the United States until what he called the “brutal” new tariffs had been “clarified.” The 27-nation EU and other countries also showed willingness to negotiate as they refrained from immediate retaliatory measures, with almost a week until the harsher US levies actually take effect. Beijing said it was “maintaining communication” with Washington over trade issues, and EU trade chief Maros Sefcovic planned to speak with US counterparts on Friday. However, Brazil’s president vowed to take “all appropriate measures.”
Gold — a safe-haven investment — hit new record prices, oil fell, and the dollar slumped against other major currencies. The head of the World Trade Organization, which helps manage global trading, warned the upheaval may lead to contraction of “one percent in global merchandise trade volumes this year.”
– Global economic ‘sumo wrestler’ –
Trump has brushed off warnings about triggering a global economic slowdown and politically damaging price rises at home. Republican Senator Mitch McConnell broke ranks with Trump, slamming tariffs as “bad policy.” “Preserving the long-term prosperity of American industry and workers requires working with our allies, not against them,” he said. But while Trump is under pressure to avoid a drawn-out trade war, he appears determined to stick with the tariffs until he forces competitors to play by US rules. White House spokeswoman Karoline Leavitt told CNN that Trump made it clear that “this is not a negotiation.” And Lutnick also struck a hard line, saying, “You can’t really fight with the United States.” “You fight…the greatest customer in the world, you’re going to lose. We are the sumo wrestler of this world,” he said.
– ‘Treat us badly’ –
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. The figure for the European Union was 20 percent, and 24 percent on Japan. For the rest, Trump said he would impose a “baseline” tariff of 10 percent, including on another key ally, Britain, which will come into effect on Saturday, while the higher duties will kick in on April 9.
© 2024 AFP
