Trump’s reciprocal tariffs kick in: Pricier phones, laptops in US and stymied global business flows
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US President Donald Trump claimed that his tariffs were already bringing in almost US$2 billion a day.
PHOTO: REUTERS
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WASHINGTON – The era of cheap Chinese goods in America is over.
Steep tariffs kicked in at midnight in Washington on imports from Asia’s largest economy amid an outcry from some corporate chieftains, recession warnings from economists and pushback from Congress.
Tariffs of up to 104 per cent on China-made goods
Reciprocal tariffs – ranging from 11 per cent for Cameroon to 50 per cent for Lesotho
The 10 per cent “baseline” that applies to most nations, including Singapore
A number of senior White House officials said the administration was besieged with phone calls from countries wanting to make a deal, and priority would be accorded to countries that have not retaliated with counter tariffs against the US.
Mr Trump said he had a “great call”
Mr Trump also said he was waiting to hear from Chinese President Xi Jinping.
“China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen!” he said in a Truth Social post on April 8.
China showed no such inclination. Instead, the country said it will impose an 84 per cent tariff on US goods from April 10, up from the 34 per cent previously announced.
That previously announced retaliatory move had prompted Mr Trump to heap an extra 50 per cent duty on Chinese goods, adding up to tariffs of a whopping 104 per cent.
Meanwhile, European Union officials also approved imposing a fresh set of retaliatory duties on US imports. The duties, which would come into effect on April 15, would range from 10 per cent to 25 per cent on around €21 billion (S$31 billion) worth of American goods.
The US had applied a 20 per cent tariff on nearly all EU exports as well as a separate 25 per cent duty on cars and some auto parts.
No more ‘economic surrender’
The White House struck a note of triumphalism, with Mr Trump claiming that his tariffs were already bringing in almost US$2 billion (S$2.7 billion) a day.
“America is going to be very rich again,” the President declared.
The “era of American economic surrender is over”, White House press secretary Karoline Leavitt said in a media briefing hours before the reciprocal tariffs were set to kick in.
“America does not need other countries as much as other countries need us,” she said.
Treasury Secretary Scott Bessent, who had described the Chinese escalation to 34 per cent as a “big mistake”, also criticised Beijing’s decision not to seek talks with Washington.
“I think it’s unfortunate that the Chinese actually don’t want to come and negotiate, because they are the worst offenders in the international trading system,” he said.
In 2024, the US imported US$462.5 billion in goods and services from China and exported US$199.2 billion, resulting in a US$263.3 billion trade deficit.
Once each other’s largest trading partner, the two countries are now firing the opening salvos of a flaring trade war.
Speaking to The Straits Times, Dr Alicia Garcia Herrero, the Hong Kong-based chief economist for Asia-Pacific at French investment bank Natixis, observed that the additional 50 per cent tariffs on China do not really matter any more.
“The tariffs are already too high, and China will not be able to export to the US,” she said, noting that the extra tariffs “show Trump’s resolve”. They reflect the fact that the Trump administration “wants to decouple from China at any cost”, she added.
‘Tailored’ deals
As the Trump team proceeds to reorder world trade at breakneck speed, it is giving contradictory views about the endgame and whether the tariffs are set in stone.
Mr Trump’s trade and manufacturing senior counsellor Peter Navarro said that the tariffs were non-negotiable because the US was coping with a “national emergency” caused by enormous trade deficits.
But Mr Bessent suggested otherwise, saying that talks were just getting started after Mr Trump gave himself “maximum” negotiating leverage with his April 2 tariff announcement. “It’s going to be a busy April, May, maybe into June,” he said.
The President had the final word on the subject.
“They can both be true,” Mr Trump said. “There can be permanent tariffs, and there can also be negotiations.”
The public face of the administration, Ms Leavitt, said Mr Trump had asked for “tailored” deals.
“He met his trade team this morning and directed them to have tailor-made trade deals with each and every country that calls up this administration to strike a deal,” she said.
Asked if Mr Trump had set a deadline for the trade deals, she demurred from naming a date.
‘US has gone rogue’
Economists not linked to the administration have largely found fault with the theory behind the tariffs.
“The tariffs seek to balance trade with every partner, which can’t or won’t happen for macroeconomic reasons,” said Dr Marcus Noland, a senior fellow and executive vice-president at the Peterson Institute for International Economics in Washington.
“The tariffs would be laughably misguided if they were not so destructive,” he said.
“Not only are they regressive internationally, but they are also regressive internally. They will drive up the prices for clothing and footwear, hitting low-income families with children the hardest.”
“Overall, a lower stock market, lower growth, higher prices, and more unemployment. All of this is done without any reference to WTO (World Trade Organisation) or FTA (free trade agreement) obligations,” he said.
“The US has gone rogue,” he added.
Corporate America, which has so far played along with Mr Trump, is starting to voice its opposition.
Mr Ken Griffin, a billionaire and top Republican donor who runs hedge fund firm Citadel, called the tariffs a “huge policy mistake”.
“I may agree with your diagnosis on what the problem is, but don’t kill the patient in the pursuit of treating the disease,” he said at the University of Miami’s Centennial Celebration on April 7.
“It is wrong to tell a middle-class or economically challenged family that ‘it’s going to cost you 20 per cent, 30 per cent, 40 per cent more for your groceries, for your toaster, for a new vacuum cleaner, for a new car’,” Mr Griffin said.
Mr Bill Ackman, another billionaire who is the chief executive of the Pershing Square hedge fund, has called for a 90-day pause in the tariffs to give Mr Trump the time to “carefully and strategically resolve our historically unfair global trading position”.
Or, he said on X on April 7, the US could face a “self-induced, economic nuclear winter”.
The Consumer Technology Association has calculated that a 60 per cent to 100 per cent tariff on all imports from China could increase the cost of laptops and tablets for consumers by 46 per cent to 68 per cent.
Video-game console prices could jump by 40 per cent to 58 per cent, and smartphone prices could go up by 26 per cent to 37 per cent, it said.
Smartphones are the largest import from China
If the phones were to be made in the US, they could cost more than three times as much.
Said Mr Daniel Ives, a tech analyst: “ iPhones made in the US would cost US$3,500
“If not, it’s darker days ahead for the tech world, and US consumers will be paying the price for it,” he said in a note.
GameStop CEO Ryan Cohen, a well-known Trump supporter, also weighed in. “I can’t wait for my US$10,000 made in the USA iPhone,” he wrote in a sarcastic post on X on April 4.
Video-game company Nintendo said the pre-orders for its hotly anticipated Switch 2 console would be delayed due to the tariffs
Bipartisan Bill
Some resistance is also building up in Congress, where Mr Trump’s party has a majority in both Houses.
The Democrats, and a vocal minority of Republicans, are asserting that the President has usurped a congressional function by imposing tariffs. The Constitution mandates that Congress, and not the executive, controls the purse strings of the government.
Seven Republican senators are sponsoring a bipartisan Bill that would place a check on Mr Trump’s authority to impose tariffs.
“No president should have the power to tax everything Americans buy without being accountable to Congress,” said Senator Bill Wyden, a Democrat and ranking member of the Senate Finance Committee.
A similar Bill will be introduced in the House of Representatives by Nebraska Republican Don Bacon.
But there is also some public support for pushback against China. A large majority of Americans are sceptical about trading with China, according to a new report from the Pew Research Centre.
Only 10 per cent said trade benefits the US more than China, while 46 per cent took the opposite view in a survey of 3,605 US adults conducted between March 24 and 30. A quarter said the US and China benefit equally from their trade relationship.
But Mr Bessent had perhaps the most incisive quip as he laid the ground for tariffs in March.
“Access to cheap goods,” the Treasury Secretary told members of the Economic Club of New York, “is not the essence of the American Dream.”
Bhagyashree Garekar is The Straits Times’ US bureau chief. Her previous key roles were as the newspaper’s foreign editor (2020-2023) and as its US correspondent during the Bush and Obama administrations.
