Trump’s New Tariffs Trigger Global Trade War Fears

Markets tumble as US imposes sweeping new import taxes — UK and EU among countries hit

Donald Trump has launched a fresh wave of import tariffs, targeting some of America’s closest allies and trade partners. The move, announced on 2 April, is already causing turbulence in financial markets and raising fears of a global trade war.

What Has Trump Announced?

Starting 5 April, a 10% universal tariff will be applied to nearly all goods entering the US. On top of that, a series of “reciprocal” tariffs will be introduced on 9 April, hitting countries that Trump says have long taken advantage of the US.

Here’s what that means:

• China: Total tariffs to rise above 54%
• European Union: Tariffs up to 20%
• Japan: Facing 24% tariffs
• United Kingdom: 10% tariffs on exports

These are some of the highest average tariffs the US has imposed in decades.

Why Is Trump Doing This?

Trump claims the move will:

• Raise money for tax cuts
• Rebuild US manufacturing
• Push countries to lower their own tariffs on American goods

“We have to take care of our people first,” Trump told reporters at the White House.

The announcement is part of Trump’s ongoing push for economic nationalism, a key part of his re-election campaign.

How Have Global Leaders Responded?

World leaders and economic experts were quick to respond:

• EU President Ursula von der Leyen warned of a “major blow” to the global economy and said the EU is preparing to retaliate.
• China has promised to strike back with tariffs of its own.
• Taiwan called the move “regrettable” and plans a formal complaint.
• UK officials have yet to respond directly but are already negotiating a new trade deal with the US.

Experts predict this could lead to an escalating tit-for-tat trade war, with serious consequences for global economic growth.

Impact on Markets and Investors

Financial markets were hit immediately:

• European Stoxx 600 dropped 1.6%
• S&P 500 futures fell 2.8%
• Nasdaq 100 futures declined 3.2%
• Gold reached a record $3,150 per ounce
• Government bonds in the US and Japan rose as investors looked for safe havens

“This is close to the worst-case scenario,” said Ajay Rajadhyaksha, global research chair at Barclays.

Are Any Countries Spared?

Yes. Some goods and countries have been exempted:

• Mexico and Canada: No tariffs on goods that comply with the 2020 trade deal
• Essential imports like energy, minerals, bullion, and some pharmaceuticals have been excluded
• Tariffs already applied on steel, aluminium, and cars remain in place

Despite being frequently criticised by Trump, Mexico could benefit by gaining market share from countries now facing tariffs.

In Summary

Donald Trump’s tariff blitz has set the stage for a new global trade conflict, with major economies bracing for impact. While the US hopes to pressure other nations into fairer trade deals, markets and world leaders are already showing signs of serious concern.

Sources: (BBC.co.uk, FT.com)