**Washington**: President Trump’s announcement of extensive tariffs on various countries has sent shockwaves through global financial markets, inciting fears of inflation and retaliatory measures. The tariffs, effective from April, aim to rectify unfair trade practices but may jeopardise international economic stability.
Global markets faced significant upheaval on Thursday as President Donald Trump unveiled extensive tariffs aimed at a variety of trade partners, marking one of the most substantial adjustments to global trade practices since the aftermath of the Second World War. Through these new policies, Trump established a baseline tariff of 10% on all imports into the United States, with specific tariffs exceeding 50% applied to certain countries. The tariffs are set to formally take effect on 5 April, with “reciprocal tariffs” commencing on 9 April.
In detail, Trump has imposed a 20% tariff specifically targeting goods from the European Union, while Mexico and Canada have managed to avoid the latest changes despite previously being subject to a 25% tariff earlier this year. The tariffs aim to combat what Trump has described as longstanding unfair trade practices that have placed American businesses at a disadvantage.
The global response to this announcement was immediate and severe, with Asian markets plummeting soon after the tariffs were made public. Analysts have raised concerns about potential inflationary pressures and disruption to international trade. While proponents of the tariffs believe they will reinvigorate American manufacturing, critics caution against escalating trade tensions and potential retaliatory measures from affected nations.
In response to the new policy, several nations have expressed their discontent and outlined their intended reactions:
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China: Facing a severe blow from the increased tariffs—totaling over 50%—China’s commerce ministry called for immediate cancellation, stating that the measures could jeopardise global economic growth and disrupt international supply chains. The ministry maintains that a trade war yields no winners. Wang Wen from Renmin University noted that high tariffs have not previously diminished US-China trade volumes.
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United Kingdom: The UK has been subjected to the 10% tariff, which government officials stormed with a mix of relief and concern, having expected a higher tariff. However, the eventual economic implications could see jobs lost and lower growth forecasts.
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South Korea: Acting President Han Duck-soo announced an “all-out” response against the tariffs, which impose a 25% levy on South Korean exports. The automotive industry, critical to its economy, is anticipated to suffer significantly as exports to the US decline.
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Japan: Japanese officials expressed disappointment with Prime Minister Shigeru Ishiba noting Japan’s extensive investment in the US and questioning the rationale behind the uniform tariffs. The automotive sector also braces for increased challenges.
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India: Trump imposed a 26% tariff on all imports from India, a move described as a reprisal for Indian tariffs reaching up to 52%. However, Indian officials have labelled the situation as mixed, noting potential impacts on several industries without severely affecting pharmaceuticals, which remain exempt.
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Australia: Prime Minister Anthony Albanese said Australia is facing a hostile economic act despite being subjected only to a 10% tariff. The government decided against retaliatory measures.
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Canada and Mexico: Both countries have been spared from the new tariffs but continue to grapple with previous steel and aluminium tariffs imposed by the Trump administration.
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Taiwan: Taiwan responded to the 32% tariff by labelling it “unreasonable,” warning that such measures could lead to significant contraction in its GDP, given its dependency on exports.
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Thailand: The Thai government cautioned that the tariffs will negatively impact American consumers and expressed readiness to engage in conversations with the US aiming towards a more balanced trade relationship.
Amidst these developments, the volatility in global financial markets has been notable, with sharp declines seen in international stocks, prompting analysts to predict an unpredictable economic environment going forward. The ramifications of Trump’s tariff regime are poised to reshape trade relations on a global scale, influencing sectors ranging from automotive to electronics, and potentially inciting a series of retaliatory tariffs as nations scramble to protect their economic interests.
Source: Noah Wire Services
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