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Donald Trump launched an assault on the world’s order of trade, imposing a tariff dam on American imports in a decision that has sent financial markets in shock and in -depth the health of the global economy.
In the measures he presented as a way to “release” the American economy, the president said on Wednesday that a 10% sample would apply to almost all American imports from April 5.
Trump also revealed radical “reciprocal” prices on the goods of a multitude of larger American trade partners.
The American prices on China, the largest exporter of goods in the world, will reach more than 54% after Trump imposed 34% additional rates in more than 20% of the samples he has placed in the Asian nation this year.
The EU will be faced with total prices of up to 20%, while Japan imports – one of the closest allies of Washington – will face 24%tariffs.
America’s average tariffs will reach their highest level for decades, Wall Street banks announced on Wednesday evening. Reciprocal prices should take effect on April 9.
Addressing a rose garden wrapped in the White House on Wednesday, Trump said that his measures would collect funds to pay tax discounts and trigger a resurgence of domestic manufacturing.
“Faced with an implacable economic war, the United States can no longer pursue the policy of unilateral economic surrender,” he said.
“We have to take care of our people and we will first take care of our people.”
Trump’s announcement made us slide the contracts on stocks, contracts following the S&P 500 index down 3.3% and those following the Nasdaq 100 of the technology down 4.2% Thursday morning in Asia.
The S&P 500 has already dropped by almost 5% in the first three months of the year on fears that Trump prices slow down economic growth and trigger a new episode of higher inflation.
Investors and analysts said the prices would be felt through American companies. “It’s close to the worst case that the market feared,” said Ajay Rajadhyaksha, World Research President at Barclays. “This will cause damage.”
Michael Feroli, chief economist in the United States of JPMorgan, said the prices would considerably increase inflation and reduce consumption expenses. “This impact alone could take the economy dangerously close to the recession,” he said.
Room’s Republican President Mike Johnson told Fox Business on Wednesday that prices were still going to be “disruptors of the doors”.
He said that he was convinced that the markets would eventually calm down while the prices forced foreign leaders to “come to the table” and cut their own samples from American products.
The Topix of Japan dropped by 3.3% on Thursday, while the Yen, often a paradise for investors, jumped almost 1% compared to the dollar.
Gold increased by 0.7% to a new record of $ 3,150 per ounce Troy. The obligations of the American and Japanese government – considered among the safest assets in the world – have also rallied, which pushes lower yields.
Trump’s announcement will increase the commercial friction that has been built since he won the November elections on a populist economic protection program.
Analysts said that American business partners would have no choice but to retaliate against Trump’s measures, increasing the prospect of an economically damaging world trade war.
“The” day of reprisals “will follow the” liberation day “,” said Luca Paolini, chief strategist of Pictet Asset Management.
“Governments will look weak if they do not retaliate”, although Paolini said he expected them “leave the door open” to negotiation. General prices increase the chances of an American recession, he added.
Some articles would be exempt from reciprocal prices, according to the White House, including energy and minerals not available in the United States, as well as ingots and goods on which Trump has already exercised other tasks.
These include steel, aluminum, cars and imports to which Trump reported that it will apply a set separate from prices, including copper, pharmaceutical products, computer flea and wood.
Mexico and Canada – Trump business partners have been attacked several times in recent weeks – have also been spared the universal rate. The goods from the two countries in accordance with the 2020 trade agreement they have signed with the United States will remain exempt from prices.
“This is bad news for the world, in particular the countries that have obtained prices, but it is good news for Mexico,” said Gabriela Siller, head of financial and economic research in Banco Base. “Mexico could eventually gain market share despite Trump’s protectionist rhetoric.”
Report by Aime Williams, James Politi, Steff Chávez and Alex Rogers in Washington, Harriet Clarfelt in New York, Ian Smith in London and Christine Murray in Mexico City
