‘A big blow to the global economy’: Trading partners respond negatively, stock exchanges undermine

It is not for nothing that President Donald Trump waited on Wednesday until after closing the American stock markets with his long -awaited announcement of taxes on imports in the United States. Because although his laundry list of ‘reciprocal levies’ on products from numerous global trading partners in the rose garden of the White House with applause was received, financial markets reacted frightened.

To Wall Street, shares of large companies such as Apple, Amazon and Walmart went down to Handel after closing the stock markets. Futures for the S&P 500, the leading American stock market index, fell more than three percent, they dived by 4 percent at the Nasdaq tech fair. The Japanese Nikkei 225 index fell 4.4 percent in the opening minutes. The oil price decreased due to fear of global economic delays. The gold price rose to a record high, a sign that investors are looking for safety.

Although Trump has been announced by Trump for some time as an economic ‘Liberation Day’ for the US, they exceeded the expectations of investors. They were shocked by the long list of taxes for dozens of countries. With this, the president takes the carpet under the global trading system that the US have helped build up since the Second World War.

Moreover, the taxes were expected higher than many. Calculations by economists show that the new taxes will increase the average American rate to 25 percent, of around 3 percent, writes AP news agency. That is higher than the rate of 20 percent under the 1930 Smoot-Hawley levies, which, according to economists, worsened the great depression. Due to the size of Trumps taxes, inflation in the US and beyond can be further fueled, and economic growth turns lower.

‘Wrong’ measure

European leaders responded firmly to the announcement that the US is setting a 20 percent levy on imports from the European Union. Ursula von der Leyen, the chairman of the European Commission, calls Trump’s measures « a big blow to the world economy. » The EU will come up with a package of countermeasures if negotiations with Washington do not yield anything, she said on Thursday morning.

Nevertheless, an attempt was made to prevent further escalation. Italian Prime Minister Giorgia Meloni described the taxes as a ‘wrong’ measure that does not help any of both parties. « We will do everything we can to work on an agreement with the United States, with the aim of preventing a trade war that would inevitably weaken the West in favor of other global players, » Meloni said on Facebook.

We are confronted with a serious situation in which a global rates war has become reality

In Asia, the high levies for countries from the region were shocked on Thursday, which rise to 24 percent on imports from Japan, 34 for China, 46 percent for Vietnam and 49 percent for Cambodia. « We are confronted with a serious situation in which a global war of rates has become reality, » said the South Korean acting President Han Duck-Sooo. South Korea, which has to deal with import duties of 25 percent, wants to negotiate to reduce that level, he said. « The government must use all its resources to overcome the trade crisis. »

China will take countermeasures to protect its rights and interests, the Chinese Ministry of Trade said on Thursday. Beijing called on the US to cancel the taxes and resolve disagreements with trading partners with dialogue. « Many trading partners have expressed their strong dissatisfaction and clear opposition, » the ministry said in a statement. According to Citibank, the trade conflict threatens a « hard decoupling » of the economies of the two superpowers.

Exhibition position

In North America the damage was not that bad this time: neighboring countries Mexico and Canada, the two largest trading partners of the US, who have been in the Trump fire line for months, were not on the country list on Thursday until their relief. Goods that comply with their trilateral free trade agreement USMCA remain exempt from taxes, even the universal basic of 10 percent, the White House – an exceptional position that entered a month ago. This makes the White House, in contrast to earlier signals, continental trade with neighboring countries, which are highly integrated with the US economically, may not want to completely renounce it.

However, the two neighboring countries still have to do with the previously announced levies in the crucial car industry and the taxes on steel and aluminum. And they are 25 percent on their heads if they do not do enough in Trumps’s eyes about the smuggling of drugs, in particular Fentanyl, and the inflow of migrants through their limits with the US.

« We are going to fight these rates with countermeasures, » said Canadian Prime Minister Mark Carney, a former central banker. According to him, Trumps measures will fundamentally change the international trading system, he said in Ottawa.

Symbolic defeat

In Washington Trump suffered a few hours after his event in the Rozentuin on Wednesday evening, a small symbolic defeat: the Senate assumed a resolution against the levies on Imada Imada – a remarkable reprimand of Trump’s trade policy, who received support from four Republican senators. The resolution disputes the ’emergency situation’ proclaimed by Trump on the American northern border for the smuggling of Fentanyl, which serves as a legal basis for charges against Canada per decree. In contrast to the southern border, however, hardly any fentanyl is intercepted on the American northern border. The resolution has little chance in the House of Representatives, but nevertheless exposes republican resistance against Trumps fight against free trade.

Trumps former vice president and party colleague Mike Pence went even further on Wednesday in his criticism of the taxes of his former boss, who will significantly increase costs for American companies and consumers. He rejected them on X, formerly Twitter, as « the largest tax increase in peacetime in American history. » According to Pence, the taxes are ten times as high as the rates that Trump announced in his first term. « They will cost American families more than 3,500 dollars a year, » said Pence, who broke with Trump because of his unjustified claims that he, and not Joe Biden, was the winner of the 2020 presidential election.

Prime Minister Anthony Albanese condemned the taxes in Australia. Australia is the largest exporter from beef to the US, but does not import meat from America due to rules in the field of bio -safety. « The rates of the Trump government are not based on logic and they go against the basis of the partnership between our two countries, » said Albanese. « This is not the act of a friend. »

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