Donald Trump finally revealed his heavily touted set of trade tariffs, which immediately sent shock waves around the world.
In a highly charged speech, the US President told a cheering audience that his country had been, “looted, pillaged, raped, plundered” by other nations, including close partners who he described as bad actor, as he unveiled a slew of tariffs ranging from a baseline of 10 per cent up to 50 per cent.
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories as he promised to Make America Wealthy Again.
To enthesis his point, the President held up a chart detailing the worst offenders – which also showed the new tariff the US would be imposing against the tariffs faced by American exporters.
In what was described as Liberation Day, Mr Trump declared the package of measures as, “our declaration of independence”.
The 10 per cent universal baseline tariff will come into effect on Saturday 5th April while the more punitive “reciprocal tariffs” on specific countries will begin less than a week later on Wednesday 9th April.
The UK, Australia and New Zealand, along with several other countries face the minimum 10 cent tariff, however Mr Trump hit the EU with a 20 tariff, while trading rival and the emerging economic powerhouses of China and India were slapped with 34 per cent and 26 per cent.
In China’s case the additional tariff is on top of measures already announced by the President, which takes the levy on Chinese imports to over 50 per cent/
Canada and Mexico were exempted from the latest round of tariffs, however they have previously been hit by a 25 tariff, levied earlier in the year impacting steel, aluminium and the automotive industry.
As the reverberations were still being felt with losses on stock markets around the world as investors took flight, and gold hitting a new high, the big question on most lips in Westminster is will the imposition of the tariffs trigger a full-blown global trade war.
Among the first of the world leaders to respond was Canadian Prime minister Mark Carney who in bombastic comments said he would “fight these tariffs with countermeasures” and “build the strongest economy in the G7”. EU Chief, Ursula Von der Leyen vowed that Europe would take a unified approach and warned that is negotiation failed the block is preparing countermeasures. “If you take on one of us, you take on all of us”, she said.
Negotiations between different EU member states will begin next week, Bernd Lange, who chairs the European Parliament’s Committee on International Trade told the BBC.
While the Chinese Ministry of Commerce urged the US to “immediately cancel” the tariffs, adding that they would, “resolutely take countermeasures to safeguard its own rights and interests”.
Those hit with the lowest level of tariffs, seemed to breathe a sigh of relief and suggest a more cautious response to the President’s actions.
Downing Street suggested that UK’s lower tariffs “vindicates” the Government’s policy on engagement with the US and the considerable efforts being made to secure a comprehensive trade deal.
Sir Keir Starmer said he would “fight” to secure a trade deal, adding that the government would respond with “cool and calm heads”. Comments echoed by the Business Secretary Jonathan Reynolds, who told Times Radio earlier that “we’ve got a good result, relatively.” Adding: “The UK is in a better position than a lot of other countries from what was announced last night. I’m happy that we in the UK can set our own trade policy in our own interest.”
He later confirmed that the UK was drawing up a list of US products that the Government could impose retaliatory taxes on if necessary. He added it would be consulting businesses on the possible action up until 1st May.
No doubt the picture will become clearer over coming days, as to the response of those countries effected by the tariffs, but unless cooler heads prevail, it looks certain that retaliatory action will follow to the detriment of consumers around the world. If this sparks a further bout of tit-for-tat measures then the impact on the global economy is likely to be severe, with analysts talking about anything from stagflation to depression.
**We approached a number of the embassies of the world’s biggest economies who have a presence in London and asked for a comment. So far only Canada responded referring us to the speech made by Prime Minister Carney. We will provide further updates once they are received.**
US unleashes tsunami of trade tariffs, but will they lead to a full-scale trade war?
