US President’s new ‘Liberation Day’ tariffs set global markets reeling and China vows retaliation

In what has been described as a watershed moment for global trade, Trump announced universal 10% tariffs on all imports into the USA on 2 April, with higher rates for those countries he described as the “worst offenders”, the 2 April report said.

Following the announcement, stock markets in London, Paris and Berlin dropped sharply while Asian markets also fell but then recovered slightly, the BBC wrote.

Imposed by executive order, the new tariffs were necessary to address trading imbalances and to protect US jobs and manufacturing, Trump has claimed.

A statement on the official White House website on 2 April said: “Today, President Donald J Trump declared that foreign trade and economic practices have created a national emergency and his order imposes responsive tariffs to strengthen the international economic position of the United States and protect American workers.”

However, according to a 2 April report by the Independent, the new tariffs will make Americans poorer, make businesses less competitive, and retaliation by the EU, China and others will cut off valuable export markets, particularly for farmers and the oil industry.

The “baseline” 10% tariff on all imports to the USA will go into effect on 5 April.

Although some countries - including Argentina, Brazil, Saudi Arabia, Turkey and the UK - would only face the base rate, specific reciprocal tariffs would be imposed on around 60 other countries and would go into effect on 9 April, the BBC wrote.

According to Trump’s officials quoted in the report, these countries charged higher tariffs on US goods, imposed ‘non-tariff’ barriers to US trade or had otherwise acted in ways believed to have undermined US economic goals.

The key trading partners subject to the customised tariff rates include:

• EU: 20%

• China: 54%

• Vietnam: 46%

• Thailand: 36%

• Japan: 24%

• Cambodia: 49%

• South Africa: 30%

• Taiwan: 32%

As Canada and Mexico had already been targeted during Trump’s presidency, the 10% baseline rate would not apply to them, the report said.

Responding to the announcement, European Commission (EC) President Ursula von der Leyen was quoted as saying the new tax imports would cause “dire” consequences for millions of people around the globe.

China’s Ministry of Commerce also condemned the US tariffs and vowed “resolute countermeasures”, according to the BBC.

“History has proven that raising tariffs does not solve the USA’s own problems,” a ministry statement said.

“It harms US interests while also threatening global economic growth and the stability of industrial and supply chains.”

French Prime Minister François Bayrou was quoted by the BBC as saying that Trump’s tariffs had created a “catastrophe” for both France and the USA.

Germany’s finance minister Jorg Kukies told the BBC: “No one I spoke with closed the door on negotiations after the announcement”, while Spain’s economy minister said the country wanted to reach a “negotiated situation with the USA on tariffs”.

In response to the move, farmers’ associations in the USA said the trade war would force farms to close, a 2 April Successful Farming report said.

“We share the administration’s goal of levelling the playing field with our international partners, but increased tariffs threaten the economic sustainability of farmers who have lost money on most major crops for the past three years,” American Farm Bureau Federation (AFBF) President Zippy Duvall was quoted as saying.

“More than 20% of farm income comes from exports, and farmers rely on imports for crucial supplies like fertiliser and specialised tools. Tariffs will drive up the cost of critical supplies, and retaliatory tariffs will make American-grown products more expensive globally. The combination not only threatens farmers’ competitiveness in the short-term, but it may cause long-term damage by leading to losses in market share.”

With around 20% of all US agricultural production going overseas, some sources in the agricultural sector are concerned measures introduced by the Trump administration could negatively impact relations with other countries that took decades to develop, and which could affect American corn and soyabean farmers, according to a report by The Guardian.

In recent years, China - the world’s largest importer of soyabeans which, until recently, was largely sourced from US farmers - had developed a new trade relationship with Brazil as a direct result of the first Trump administration’s trade war, the 1 April report said.

President Trump’s reciprocal tariff plan would also impact the ocean shipping sector, according to a 2 April Reuters report.

“The implementation of stacked tariffs has led to mounting confusion,” Blake Harden, the Retail Industry Leaders Association’s vice president of international trade, was quoted as saying.

“Companies have not had adequate time, certainty, and guidance they need to incorporate these changes and comply.”