MARKETS HIT
Wall Street plunged on Friday, following similar drops in Asia and Europe.
Economists have also warned that the tariffs could dampen growth and fuel inflation.
Trump’s latest tariffs have notable exclusions, however.
They do not stack onto recently imposed 25 per cent tariffs hitting imports of steel, aluminum and automobiles.
Also temporarily spared are copper, pharmaceuticals, semiconductors and lumber, alongside “certain critical minerals” and energy products, the White House said.
But Trump has ordered investigations into copper and lumber, which could lead to further duties soon.
He has threatened to hit other industries like pharmaceuticals and semiconductors as well, meaning any reprieve might be limited.
Canada and Mexico are unaffected by the latest move as they already face separate duties of up to 25 per cent on goods entering the US outside a North America trade agreement.
RETALIATION RISK
While Trump’s staggered deadlines allow space for countries to negotiate, “if they can’t get a reprieve, they are likely to retaliate, as China already has,” Oxford Economics warned this week.
EU trade chief Maros Sefcovic said the bloc, which faces a 20 per cent tariff, will act in “a calm, carefully phased, unified way” and allow time for talks.
But he said it “won’t stand idly by”.
France and Germany have said the EU could respond by imposing a tax on US technology companies.
Japan’s prime minister called for a “calm-headed” approach after Trump unveiled 24 per cent tariffs on Japanese-made goods.
Meanwhile, Trump said he held a “very productive” call with Vietnam’s top leader, with imports from the Southeast Asian manufacturing hub facing extraordinary 46 per cent US duties.
Since returning to the presidency, Trump has hit imports from Canada and Mexico with tariffs over illegal immigration and fentanyl smuggling, and imposed an additional 20 per cent rate on goods from China.
Come Apr 9, the added levy on Chinese products this year will reach 54 per cent.
Trump’s 25 per cent auto tariffs also took effect this week, and Jeep-owner Stellantis has paused production at some Canadian and Mexican assembly plants.
Trump’s new global levies mark “the most sweeping tariff hike since the Smoot-Hawley Tariff Act, the 1930 law best remembered for triggering a global trade war and deepening the Great Depression”, said the Center for Strategic and International Studies (CSIS).
Oxford Economics estimates the action will push the average effective US tariff rate to 24 per cent, “higher even than those seen in the 1930s”.
