Trade: World Leaders React as Trump Sends Shockwaves with US High Tariffs
• World leaders react
(Reuters) – President Donald Trump’s new tariffs sent shockwaves through markets on Thursday with the dollar and U.S. stocks among the hardest hit on fears a broadening trade war will unleash a recession.
A combination of a 10% baseline levy and higher duties on a number of other trading partners reverses decades of liberalisation that shaped the global trade order.
“This is the worst-case scenario,” said Jay Hatfield, CEO at Infrastructure Capital Advisors.
“Enough to potentially send the U.S. into a recession,” he added, echoing nervous market sentiment as the aggressive duties crystallized investor fears that have swirled during Trump’s second term.
A telling fall in the dollar , a 3.4% slide in Nasdaq futures and the biggest jump in the bond market for nine months all pointed to deep discomfort about the world’s biggest consumer market disappearing behind a tariff wall.
“The higher tariffs will dent U.S. efforts to reduce inflation, so it’s possible the U.S. will witness stagflation,” said Wang Zhou, partner at Zhouzhu Investment in Shanghai.
“Investors are voting with their feet.”
Fed funds futures rallied as investors priced in a higher chance of the Federal Reserve cutting interest rates.
The base 10% tariffs go into effect on April 5 and the higher reciprocal rates on April 9.
Tariffs of 25% on vehicle imports took effect at midnight and the new levies include a 34% tariff on imports from China, 46% on Vietnam, 24% on Japan and 20% on Europe.
The U.S. dollar index sank to a near six-month low on Thursday, falling most against safe havens such as the yen and franc .
An initial 3% slide in S&P 500 futures and falls of nearly 6% and 7% for Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab respectively were deeper than market drops in Hong Kong and Tokyo and declines in early trade in European financial centres.
“These tariffs will surely push consumers in China and other countries to consume more of their own products or other brands,” said Eric M. Clark, a portfolio manager at Alpha Brands in California.
Here are some reactions from top officials and governments around the world:
EUROPEAN COMMISSION PRESIDENT URSULA VON DER LEYEN
“President Trump’s announcement of universal tariffs on the whole world, including the EU, is a major blow to the world economy.”
“Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe.”
“We are already finalising a first package of countermeasures in response to tariffs on steel. And we are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail.”
CHINA COMMERCE MINISTRY
“China firmly opposes this and will take countermeasures to safeguard its own rights and interests.”
“There are no winners in trade wars, and there is no way out for protectionism. China urges the U.S. to immediately lift unilateral tariffs and properly resolve differences with its trading partners through dialogue on an equal footing.”
JAPAN PRIME MINISTER SHIGERU ISHIBA
“The U.S. government’s broad trade restrictions will have a significant impact not only on the economic relationship between Japan and the U.S., but also on the global economy and the multilateral trading system as a whole.”
“We have serious concerns about the consistency of these measures with the WTO Agreement and the Japan-U.S. Trade Agreement.”
“We will continue to strongly urge the U.S. to review its measures.”
CANADIAN PRIME MINISTER MARK CARNEY
“(Trump) has preserved a number of important elements of our relationship, the commercial relationship between Canada and the United States. But the fentanyl tariffs still remain in place, as do the tariffs for steel and aluminum.”
“We are going to fight these tariffs with countermeasures, we are going to protect our workers, and we are going to build the strongest economy in the G7.”
UK PRIME MINISTER KEIR STARMER
“Nobody wins in a trade war. That is not in our national interest.”
“And we have a fair and balanced trade relationship with the US.”
“Negotiations on an economic prosperity deal, one that strengthens our existing trading relationship – they continue, and we will fight for the best deal for Britain.”
“Nonetheless… I will only strike a deal if it is in the national interest.”
GERMAN FINANCE MINISTER JOERG KUKIES
“It would be naive to think that if we just sit there and let this happen, things will get better, so I’m expecting a strong response by the European Union.”
UK BUSINESS MINISTER JONATHAN REYNOLDS
“Anything that disrupts the global trading system is a threat to the UK, because we are a much more globally orientated trading economy than some partners.”
“We’ve got to reserve every right that we have to respond to this if we need to.”
BRAZILIAN FOREIGN MINISTRY
“The Brazilian government regrets the decision made by the North American government today, April 2, to impose additional tariffs of no more than 10% on all Brazilian exports to that country.”
“The Brazilian government is evaluating all possible actions to ensure reciprocity in bilateral trade, including resorting to the World Trade Organization, in defense of legitimate national interests.”
AUSTRALIAN PRIME MINISTER ANTHONY ALBANESE
“The (Trump) administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend. Today’s decision will add to uncertainty in the global economy and it will push up costs for American households.”
SOUTH KOREAN ACTING PRESIDENT HAN DUCK-SOO
“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis.”
NEW ZEALAND TRADE MINISTER TODD MCCLAY
“New Zealand’s interests are best served in a world where trade flows freely … New Zealand’s bilateral relationship with the U.S. remains strong. We will be talking with the administration to get more information, and our exporters to better understand the impact this announcement will have.”
SPANISH PRIME MINISTER PEDRO SANCHEZ
“Spain will protect its companies and workers and will continue to be committed to an open world.”
SWEDISH PRIME MINISTER ULF KRISTERSSON
“We don’t want growing trade barriers. We don’t want a trade war … We want to find our way back to a path of trade and cooperation together with the US, so that people in our countries can enjoy a better life.”
SWISS PRESIDENT KARIN KELLER-SUTTER
“(The Federal Council) will quickly determine the next steps. The country’s long-term economic interests are paramount. Adherence to international law and free trade remain core values.”
IRISH PRIME MINISTER MICHEAL MARTIN
“The decision by the U.S. tonight to impose 20% tariffs on imports from across the European Union is deeply regrettable. I strongly believe that tariffs benefit no one. My priority, and that of the government, is to protect Irish jobs and the Irish economy.”
ITALIAN PRIME MINISTER GIORGIA MELONI
“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favor of other global players.”
MANFRED WEBER, PRESIDENT OF THE EPP, LARGEST PARTY IN EUROPEAN PARLIAMENT
“To our American friends, today isn’t liberation day – it’s resentment day. Donald Trump’s tariffs don’t defend fair trade; they attack it out of fear and hurt both sides of the Atlantic. Europe stands united, ready to defend its interests, and open to fair, firm talks.”
COLOMBIAN PRESIDENT GUSTAVO PETRO
“We will only make U.S. imports more expensive if they take away our jobs. But we won’t raise tariffs if their goods help create higher-value jobs.”
Culled from Reuters News
(Reuters) – President Donald Trump’s new tariffs sent shockwaves through markets on Thursday with the dollar and U.S. stocks among the hardest hit on fears a broadening trade war will unleash a recession.
A combination of a 10% baseline levy and higher duties on a number of other trading partners reverses decades of liberalisation that shaped the global trade order.
“This is the worst-case scenario,” said Jay Hatfield, CEO at Infrastructure Capital Advisors.
“Enough to potentially send the U.S. into a recession,” he added, echoing nervous market sentiment as the aggressive duties crystallized investor fears that have swirled during Trump’s second term.
A telling fall in the dollar , a 3.4% slide in Nasdaq futures and the biggest jump in the bond market for nine months all pointed to deep discomfort about the world’s biggest consumer market disappearing behind a tariff wall.
“The higher tariffs will dent U.S. efforts to reduce inflation, so it’s possible the U.S. will witness stagflation,” said Wang Zhou, partner at Zhouzhu Investment in Shanghai.
“Investors are voting with their feet.”
Fed funds futures rallied as investors priced in a higher chance of the Federal Reserve cutting interest rates.
The base 10% tariffs go into effect on April 5 and the higher reciprocal rates on April 9.
Tariffs of 25% on vehicle imports took effect at midnight and the new levies include a 34% tariff on imports from China, 46% on Vietnam, 24% on Japan and 20% on Europe.
The U.S. dollar index sank to a near six-month low on Thursday, falling most against safe havens such as the yen and franc .
An initial 3% slide in S&P 500 futures and falls of nearly 6% and 7% for Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab respectively were deeper than market drops in Hong Kong and Tokyo and declines in early trade in European financial centres.
“These tariffs will surely push consumers in China and other countries to consume more of their own products or other brands,” said Eric M. Clark, a portfolio manager at Alpha Brands in California.
Here are some reactions from top officials and governments around the world:
EUROPEAN COMMISSION PRESIDENT URSULA VON DER LEYEN
“President Trump’s announcement of universal tariffs on the whole world, including the EU, is a major blow to the world economy.”
“Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe.”
“We are already finalising a first package of countermeasures in response to tariffs on steel. And we are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail.”
CHINA COMMERCE MINISTRY
“China firmly opposes this and will take countermeasures to safeguard its own rights and interests.”
“There are no winners in trade wars, and there is no way out for protectionism. China urges the U.S. to immediately lift unilateral tariffs and properly resolve differences with its trading partners through dialogue on an equal footing.”
JAPAN PRIME MINISTER SHIGERU ISHIBA
“The U.S. government’s broad trade restrictions will have a significant impact not only on the economic relationship between Japan and the U.S., but also on the global economy and the multilateral trading system as a whole.”
“We have serious concerns about the consistency of these measures with the WTO Agreement and the Japan-U.S. Trade Agreement.”
“We will continue to strongly urge the U.S. to review its measures.”
CANADIAN PRIME MINISTER MARK CARNEY
“(Trump) has preserved a number of important elements of our relationship, the commercial relationship between Canada and the United States. But the fentanyl tariffs still remain in place, as do the tariffs for steel and aluminum.”
“We are going to fight these tariffs with countermeasures, we are going to protect our workers, and we are going to build the strongest economy in the G7.”
UK PRIME MINISTER KEIR STARMER
“Nobody wins in a trade war. That is not in our national interest.”
“And we have a fair and balanced trade relationship with the US.”
“Negotiations on an economic prosperity deal, one that strengthens our existing trading relationship – they continue, and we will fight for the best deal for Britain.”
“Nonetheless… I will only strike a deal if it is in the national interest.”
GERMAN FINANCE MINISTER JOERG KUKIES
“It would be naive to think that if we just sit there and let this happen, things will get better, so I’m expecting a strong response by the European Union.”
UK BUSINESS MINISTER JONATHAN REYNOLDS
“Anything that disrupts the global trading system is a threat to the UK, because we are a much more globally orientated trading economy than some partners.”
“We’ve got to reserve every right that we have to respond to this if we need to.”
BRAZILIAN FOREIGN MINISTRY
“The Brazilian government regrets the decision made by the North American government today, April 2, to impose additional tariffs of no more than 10% on all Brazilian exports to that country.”
“The Brazilian government is evaluating all possible actions to ensure reciprocity in bilateral trade, including resorting to the World Trade Organization, in defense of legitimate national interests.”
AUSTRALIAN PRIME MINISTER ANTHONY ALBANESE
“The (Trump) administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend. Today’s decision will add to uncertainty in the global economy and it will push up costs for American households.”
SOUTH KOREAN ACTING PRESIDENT HAN DUCK-SOO
“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis.”
NEW ZEALAND TRADE MINISTER TODD MCCLAY
“New Zealand’s interests are best served in a world where trade flows freely … New Zealand’s bilateral relationship with the U.S. remains strong. We will be talking with the administration to get more information, and our exporters to better understand the impact this announcement will have.”
SPANISH PRIME MINISTER PEDRO SANCHEZ
“Spain will protect its companies and workers and will continue to be committed to an open world.”
SWEDISH PRIME MINISTER ULF KRISTERSSON
“We don’t want growing trade barriers. We don’t want a trade war … We want to find our way back to a path of trade and cooperation together with the US, so that people in our countries can enjoy a better life.”
SWISS PRESIDENT KARIN KELLER-SUTTER
“(The Federal Council) will quickly determine the next steps. The country’s long-term economic interests are paramount. Adherence to international law and free trade remain core values.”
IRISH PRIME MINISTER MICHEAL MARTIN
“The decision by the U.S. tonight to impose 20% tariffs on imports from across the European Union is deeply regrettable. I strongly believe that tariffs benefit no one. My priority, and that of the government, is to protect Irish jobs and the Irish economy.”
ITALIAN PRIME MINISTER GIORGIA MELONI
“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favor of other global players.”
MANFRED WEBER, PRESIDENT OF THE EPP, LARGEST PARTY IN EUROPEAN PARLIAMENT
“To our American friends, today isn’t liberation day – it’s resentment day. Donald Trump’s tariffs don’t defend fair trade; they attack it out of fear and hurt both sides of the Atlantic. Europe stands united, ready to defend its interests, and open to fair, firm talks.”
COLOMBIAN PRESIDENT GUSTAVO PETRO
“We will only make U.S. imports more expensive if they take away our jobs. But we won’t raise tariffs if their goods help create higher-value jobs.”
Culled from Reuters News
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