It is war in the global markets, all because of how Trump is changing and expanding tariffs. This week, a wave of new tariffs seized centre stage once more, waking traders, businesses, and entire economies to an unpleasant surprise. Although trade disputes and tariffs have never truly disappeared, Washington’s most recent announcement has sent global markets into yet another tizzy, leaving many wondering how much more upheaval people and businesses can handle. Nations are now subject to new tariffs, and the repercussions are felt everywhere from Asian manufacturing facilities to Wall Street trading floors.
Trump imposes high new tariffs on 69 countries, sending global markets reeling
Donald Trump’s latest wave of tariffs on exports from dozens of trading partners sent global stock markets tumbling on Friday and countries and companies scrambling to seek ways to strike better deals. As Trump presses ahead with plans to reorder the global economy with the highest tariff rates since the early 1930s, Switzerland, “stunned” by 39% tariffs, sought more talks, as did India, hit with a 25% rate.
New tariffs also include a 35% duty on many goods from Canada, 50% for Brazil, and 20% for Taiwan. Taiwan said its rate was “temporary,” and it expected to reach a lower figure. The presidential order listed higher import duty rates of 10% to 41% starting in a week’s time for 69 trading partners, taking the U.S. effective tariff rate to about 18%, from 2.3% last year, according to analysts at Capital Economics.
As Trump’s trade disruption looms, oil declines, Asia falters, and the EU seeks clarification
Global shares stumbled, with Europe’s STOXX 600.STOXX down 1.8% on the day and 2.5% on the week, on track for its biggest weekly drop since Trump announced his first major wave of tariffs on April 2. Wall Street also opened sharply lower on Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan. MIAPJ0000PUS fell 1.5%, bringing the total loss this week to roughly 2.7%.
In commodity markets, oil prices continued to fall after a 1% plunge on Thursday. Trump’s new tariffs have created yet more uncertainty, with many details unclear. They are set to take effect on Aug 7 at 0401 GMT, a White House official said. The European Union, which struck a framework deal with Trump on Sunday, is still awaiting more Trump orders to deliver on agreed carve-outs, including on cars and aircraft.
When Trump’s executive order makes headlines, markets react quickly
- Exporters were among the biggest losses as major Asian market indexes closed precipitously lower.
- As investors attempted to gauge the extent of the damage, Wall Street’s major indexes also fell.
- Businesses that depend on international supply chains, such as computer and auto manufacturers, now have new concerns about cost increases.
Tariffs have an impact on both consumers and businesses, and they don’t just remain on policy documents and spreadsheets. Businesses that import components or raw materials now have to pay more, which sometimes means reducing spending elsewhere or passing the cost on to customers, and to add to that, global markets are flat ahead of Fed and tariff decisions.
Countries hit with hefty tariffs said they will seek to negotiate with the U.S. in hopes of getting a lower rate. Switzerland said it would push for a “negotiated solution” with the U.S. South Africa’s Trade Minister Parks Tau said he was seeking “real, practical interventions” to defend jobs and the economy against the 30% U.S. tariff it faces. Southeast Asian countries, however, breathed a sigh of relief after the U.S. tariffs on their exports were lower than threatened and levelled the playing field with a rate of about 19% across the region’s biggest economies, and now the G20 meets in South Africa amid tariff worries.
GCN.com/Reuters.