Trump’s latest tariffs kick in, triggering more market carnage
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US President Donald Trump's tariffs have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply lower.
PHOTO: REUTERS
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BEIJING/WASHINGTON – US President Donald Trump’s reciprocal tariffs on dozens of countries took effect on April 9, including massive 104 per cent duties on Chinese goods
His punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of recession and sent stock markets around the world reeling.
The S&P 500 has shed nearly US$6 trillion (S$8.1 trillion) in value since Mr Trump unveiled the tariffs a week ago, the deepest four-day loss since the benchmark’s creation in the 1950s.
The index is now nearing a bear market, defined as 20 per cent below its most recent high.
A sell-off across most Asian markets resumed on April 9 with Japan’s Nikkei down 3 per cent, South Korea’s won currency hitting a 16-year low and government bonds suffering heavy losses as investors dashed for the safety of cash.
European and US stock futures pointed to more pain ahead.
Chinese stocks held firm, however, as state support propped up the ailing market.
Mr Trump has offered investors mixed signals about whether the tariffs will remain in the long term, describing them as “permanent” but also boasting that they are pressuring other leaders to ask for negotiations.
“We have a lot of countries coming in that want to make deals,” he noted at a White House event on the afternoon of April 8. He said at a later event that he expected China to pursue an agreement as well.
Mr Trump’s administration has scheduled talks with South Korea and Japan, two close allies and major trading partners. Italian Prime Minister Giorgia Meloni is due to visit next week.
The deputy prime minister of Vietnam, the low-cost Asian manufacturing hub hit with some of the highest duties globally, is set to talk with Mr Trump’s Treasury Secretary Scott Bessent later on April 9.
The prospect of deals with other countries pushed stock markets up earlier on April 8, but US stocks ceded their gains by the end of the trading day
China vows to fight
Mr Trump nearly doubled duties on Chinese imports, which had been set at 54 per cent last week, in response to counter-tariffs that Beijing announced last week. China has vowed to fight
Top Chinese brokerages have pledged to work together to help steady domestic share prices in response to the tariff-induced turmoil.
Central banks in New Zealand and India cut rates on April 9 in what could presage a broader move by policymakers to try and cushion the tariff hit to their economies.
Other nations are funneling fiscal support to key export sectors with South Korea announcing a raft of emergency measures for automakers, including tax cuts and subsidies.
Some economists have warned that US consumers are likely to bear the brunt of the trade war, facing higher prices on everything from sneakers to wine.
Nearly three-quarters of Americans expect the prices of everyday items to rise in the next six months, a new Reuters/Ipsos poll found.
The full effects of the April 9 tariffs may not be felt for some time, as any goods already in transit as of midnight will be exempt from the new tariffs as long as they arrive in the US by May 27.
Mr Trump’s earlier across-the-board 10 per cent tariffs on all imports from many countries began on April 5. The latest round of duties, which took effect at 12.01am ET (0401 GMT), are aimed at countries that are “ripping off” the US, according to him.
That list includes many of the United States’ closest allies, including the European Union, which was hit with a 20 per cent tariff as well as industry-specific duties. The 27-member bloc will vote on initial counter-measures later on April 8.
Mr Trump has said the tariffs are a response to barriers put on US goods and are needed to fix America’s trade imbalances. He has also accused countries including Japan of devaluing their currencies to gain a trade advantage, something Tokyo denies.
Japan’s finance minister on April 9 said trade negotiations with Washington could include foreign exchange rates.
Mr Trump has signalled he may not be finished with tariffs. In remarks to Republican lawmakers on the evening of April 9, he said he would soon announce “major” tariffs on pharmaceutical imports
