U.S. President Donald Trump’s “reciprocal” tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods, deepening his global trade war even as he prepared for negotiations with some nations.
According to BusinessDay, Trump’s punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply downward.
The S&P 500 has shed nearly $6 trillion in value since Trump unveiled the tariffs a week ago, the deepest four-day loss since the benchmark’s creation in the 1950s. The index is now nearing a bear market, defined as 20% below its most recent high.
Stock markets in Asia dropped again on Wednesday after a short break from falling. Japan’s main stock index fell over 3%, and South Korea’s currency hit its lowest value in more than 16 years. U.S. stocks were also expected to fall for a fifth day in a row.
Trump has sent mixed messages about whether these tariffs will stay in place long-term. He’s called them “permanent” but also bragged that they’re pushing other world leaders to request trade talks.
“We have a lot of countries coming in that want to make deals,” he said at the White House on Tuesday. Later, he mentioned he expects China to seek an agreement too.
Trump’s team has already scheduled discussions with South Korea and Japan, two close allies and major trading partners. Italy’s Prime Minister will visit next week. Vietnam’s deputy prime minister, whose country faces some of the highest tariffs, will meet with Trump’s Treasury Secretary today.
The possibility of new trade agreements briefly pushed stock markets up on Tuesday, but U.S. stocks lost those gains by the end of the day.
Trump nearly doubled the tariffs on Chinese imports from the 54% announced last week. This happened after China announced counter-tariffs. China has promised to fight what it sees as blackmail.
Top Chinese investment firms have promised to work together to stabilise their stock market during this tariff-caused turmoil.
Economists warn that American consumers will likely pay higher prices on many products, from sneakers to wine, because of this trade war.
The full impact of Wednesday’s tariffs might not be felt immediately. Any goods already being shipped as of midnight will avoid the new taxes as long as they arrive in the U.S. by May 27.
Trump’s earlier 10% tariffs on all imports from many countries began on Saturday. This newest round of tariffs, which started at 5:01 a.m. WAT (West Africa Time), targets countries that are “ripping off” the U.S., according to Trump.
This list includes many of America’s closest allies, including the European Union, which received a 20% tariff.
Trump claims these tariffs respond to trade barriers that have hurt American businesses. He has also accused countries like Japan of deliberately lowering their currency values to gain trade advantages, which Japan denies.
Japan’s finance minister said on Wednesday that trade talks with Washington might include discussions about currency exchange rates.
Trump has hinted that more tariffs may be coming. In comments to Republican lawmakers on Tuesday evening, he said he would soon announce “major” tariffs on imported pharmaceuticals, one of the few types of goods currently exempt from the new taxes.
