Trump's Trade Wars: As Markets Tumble, President Threatens More Tariffs

The global trade war started by US President Donald Trump with massive tariffs escalated on Monday, with Trump threatening to increase tariffs on Chinese goods and the European Union proposing retaliatory measures, writes Reuters.

Photo: Skypixel | Dreamstime.com

Financial markets around the world posted losses for a third straight day as investors worried that tough trade barriers around the world's largest consumer market would trigger a recession. The S&P 500 ended lower after a choppy session that saw it hit its lowest in a year.

Trump has said the tariffs — a minimum of 10% on all U.S. imports, with target rates of up to 50% — will help the United States rebuild its industrial base, which he says has been weakened by decades of trade liberalization.

On the subject: Beggar thy neighbor and yourself: Trump tariffs could be a disaster for the US

"This is our country's only chance to reset. Because no other president has been willing to do what I'm doing or even go through this," he told reporters at the White House. "It's not hard for me to go through this because I see a beautiful picture at the end."

Trump spoke hours after escalating his standoff with China, the world's second-largest economy.

The White House chief said he would impose an additional 9% tariff on Chinese imports on April 50 unless Beijing waived the 34% trade levies it had imposed on American goods. Those Chinese levies were in response to the 34% "mirror" tariffs announced by Trump.

Beijing responded defiantly. Trump's threat, said Chinese embassy spokesman Liu Penyu, was "a typical move of unilateralism, protectionism and economic bullying."

"We have repeatedly emphasized that pressure and threats are not the best way to interact with us," he added. "China will firmly defend its legitimate rights and interests."

Meanwhile, the European Commission has proposed retaliatory trade levies of 25% on a range of US products, including soybeans, nuts and sausages, although other potential items such as bourbon were not included, according to a document seen by Reuters.

Officials said they were open to talks with the Trump administration on a "zero for zero" deal.

“Sooner or later we will sit down at the negotiating table with the United States and find a mutually acceptable compromise,” concluded European Trade Commissioner Maroš Šefčovič.

The 27-nation bloc already faces tariffs on cars and metals, and faces 9% on other goods on April 20. Trump is also set to impose tariffs on EU alcoholic beverages.

According to Politico, US Treasury Secretary Scott Bessent met with Trump in Florida on April 6 to urge him to focus on reaching trade deals with partners in order to calm markets and show that the US strategy has an end goal.

Trump has said his administration will open trade talks with Japan, one of the U.S.'s closest allies in Asia, and administration officials say dozens of other countries have reached out in hopes of avoiding tariffs of up to 50% that the U.S. promises to impose on April 9.

The White House says the president is making good on a promise to reverse decades of trade liberalization that Trump believes has undermined the U.S. economy.

“He’s doubling down on what he thinks is working, and he’s going to continue to do that,” White House economist Kevin Hassett said on Fox News. “But the president is going to listen to our trading partners. If they come up with really good deals that help American manufacturing and farmers, I’m confident he’s going to listen.”

China's tariffs were the most forceful response yet to Trump's announcement, which has sparked confusion and condemnation from other world leaders.

Wall Street leaders have issued warnings about the US tariffs, with JPMorgan Chase CEO Jamie Dimon saying they would have long-term negative consequences and fund manager Bill Ackman saying the move would lead to an "economic nuclear winter".

Ackman is one of the few Trump supporters to question the strategy. Billionaire Elon Musk, who is leading Trump's efforts to cut government spending, has called for zero tariffs between the U.S. and Europe.

On April 7, Trump trade adviser Peter Navarro disparagingly called the Tesla CEO a "car assembler."

Investors and political leaders are left wondering whether Trump's tariffs are permanent measures or a pressure tactic to extract concessions from other countries.

Some in the EU fear that a tough response could lead to even more serious consequences for European exporters - from French cognac and Italian wine to German cars.

Volkswagen subsidiary Audi is holding back vehicles that arrived at U.S. ports after April 2 because of a newly imposed 25% tariff on cars. Aircraft parts maker Howmet Aerospace may halt some shipments if they are affected by the tariffs.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York

Some governments in Asia have expressed a willingness to engage in dialogue.

Taiwanese President Lai Ching-te has offered zero tariffs as a basis for talks, and an Indian government spokesman said New Delhi had no plans to retaliate.

Investors are now betting that the growing threat of a recession could prompt the Federal Reserve to cut interest rates as early as next month. Trump renewed calls for the Federal Reserve to cut rates on April 7, but Federal Reserve Chairman Jerome Powell has signaled he is in no rush to do so.

Read also on ForumDaily:

Stock Market Crash Destroys Americans' 401(k) Retirement Savings: What to Do If You're Hurt

What Will Go Up in Price in the US Due to Trump's Tariffs

Trump imposes tariffs on dozens of countries, including an uninhabited island near Australia

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.