US President Donald Trump’s “reciprocal” tariffs on numerous countries have now taken effect, imposing hefty duties of 104% on Chinese goods and 20% on products from the European Union. This move escalates his global trade dispute even as he prepares for negotiations with several nations.
As President Trump himself noted, “We have a lot of countries coming in that want to make deals.” However, these punitive tariffs have disrupted a trading order that has been in place for decades, leading to heightened recession fears and a significant downturn in global stock markets.
The President has also announced that the US will soon introduce a “major” tariff on pharmaceutical imports. In response, the European Union is expected to approve tariffs totaling €21 billion on US goods later today, a retaliatory measure following Mr. Trump’s imposition of 25% tariffs on European steel and aluminum exports just last month.
The EU’s trade defense committee, made up of officials from 27 member states, is set to vote on a proposal from the European Commission to implement these tariffs on a variety of US products, including soybeans, diamonds, and cosmetics. Given that it requires a qualified majority of member states—16 countries—to block it, the proposal is likely to pass.
These duties will roll out in three phases, hitting in April, May, and December. However, items such as US bourbon, dairy products, and pharmaceuticals have been removed from the final list. The EU has expressed a preference for negotiations, even offering to slash tariffs on various industrial goods to zero, yet there has been no uptake on this offer thus far.
Tánaiste Simon Harris is meeting with US Commerce Secretary Howard Lutnick in Washington today with the aim of impressing upon the Trump administration the critical need to avoid a full-blown global trade war.
Recently, the S&P stock market closed below 5,000 for the first time in nearly a year, nearing a bear market territory, defined as a 20% decline from its most recent peak. Since President Trump’s tariff announcement last Wednesday, S&P 500 companies have collectively shed $5.8 trillion (€5.2 trillion) in stock market value—marking the steepest four-day drop since the benchmark’s inception in the 1950s, according to LSEG data.
It’s worth noting that goods already in transit as of midnight will be exempt from these new levies, providing some relief amid the uncertainty.
A renewed sell-off in Asian markets resumed today, with Japan’s Nikkei down over 3% and the South Korean won touching a 16-year low. US stock futures also indicate a fifth consecutive day of losses for Wall Street.
President Trump has conveyed mixed messages regarding the long-term status of the tariffs, referring to them as “permanent” while also suggesting they are pressuring other leaders to come to the negotiating table. “If we can reach an agreement, I believe we could strike a deal,” he remarked at a White House event yesterday.
Scheduled discussions with South Korea and Japan, both close allies and major trading partners, aim to navigate these turbulent waters. Furthermore, Italian Prime Minister Giorgia Meloni is set to visit next week in what could be a crucial diplomatic engagement.
While the prospect of international agreements offered a temporary lift to stock markets earlier in the day, US stocks ultimately relinquished those gains by the trading day’s close.
In response to the counter-tariffs announced by China last week, Mr. Trump has nearly doubled the duties on Chinese imports, which were initially set at 54%. China has vowed to resist what it perceives as economic coercion, underscoring the contentious nature of this trade dispute.
Economists have raised alarms that American consumers will likely face price increases on a wide range of goods, from everyday items to luxury products. A recent Reuters/Ipsos poll showed that nearly three-quarters of Americans anticipate rising prices for everyday items within the next six months.
As it stands, the full impact of today’s tariffs may not be immediately felt. Given that goods already in transit as of midnight are exempt from the new tariffs, they must ultimately reach US shores by May 27 to qualify for this reprieve.
President Trump’s recent blanket tariffs of 10% on imports from multiple countries began on Saturday, with the latest tariffs set in motion at 12:01 AM Eastern Time (5:01 AM Irish Time) targeting nations that he argues are taking unfair advantage of the US economy. This list includes several of the US’s closest allies, such as the EU, which faces a 20% tariff, and Vietnam, which is now subject to a substantial 46% tariff.
Mr. Trump maintains that these measures are a direct response to barriers hindering American businesses and has accused several nations, including Japan, of manipulating their currencies to gain an unfair trade advantage—a claim which Japan denies. Japan’s finance minister has indicated that currency values may be included in future trade negotiations with the US.
As this situation unfolds, it will be crucial to monitor the global economic landscape closely.
Edited By Ali Musa
Axadle Times International – Monitoring.
