Blow Up in Trade: Trump Threatens China with Eye-popping Tariffs
- Escalating trade conflict - Trump warns China of fresh tariff imposition
Truth Social - Donald Trump, the enigmatic U.S. President, is whipping up another storm in the global trade world. Waving his flag of defiance, Trump has given China until Tuesday to withdraw those pesky 34% counter-tariffs, or else prepare for some fresh tariffs totaling 50% to hit the scene on Wednesday.
Trump's scathing post on Truth Social slams China for slapping on the "retaliatory tariffs" despite his clear warning that more tariffs were brewing if such countermeasures were used. In a previous post, Trump hammered China as the "biggest offender."
meanwhile, the European Union is scrambing to chill things out. It's stretched out its hand with an agreement featuring the mutual lifting of all tariffs on industrial goods to the U.S. Despite Trump's tariff decisions, the EU is game for chats - EU Commission President Ursula von der Leyen spoke up in Brussels.
Trump's rogue maneuvers are shrouding Globe in doubt. Markets are under immense pressure as U.S. Federal Reserve Chairman Jerome Powell recently cautioned about raging inflation and slowing growth for the good ol' U.S. of A.
Stock markets world over are plunging, and the sell-off on the German stock market hasn't shown any signs of slowing down. In just three days, the Dax index has plummeted 4.13% to 19,789.62 points. While it managed to reduce the initial loss of over ten percent, it's clear we're watching a nightmare unfold.
The Dax had a brief moment of respite when news broke about a possible 90-day tariff pause. However, the good vibes were short-lived, as the White House squashed the rumor, calling it "fake news." New York saw further losses with the Dow Jones Industrial index dipping 2.8% and the tech-heavy Nasdaq 100 losing 1.7%.
In typical White House fashion, they categorically ruled out any whispers about a tariff suspension, adding that more measures were on the horizon after the first part of Trump's massive tariff package kicked in. These new tariffs would be imposed on Wednesday, with substantially higher tariffs planned for countries boasting significant trade deficits, like China and the EU.
Trump, unfazed by the tumbling markets, claimed that the prices of oil and food had taken a nose-dive - no inflation in sight, he declared. However, experts weren't buying it, attributing the dropping oil prices to growing recession fears and hence declining demand. Moreover, economists predict the new tariffs to cause food prices to soar in the U.S.
Taking a firm stand, von der Leyen made it clear that the EU is hackling for negotiations with the U.S., but it's prepping possible countermeasures, should the talks fall through. This wasn't the first time EU trade ministers gathered in Luxembourg to discuss their approach.
EU Trade Commissioner Maros Sefcovic noted after the meeting with the responsible ministers of the member states that the primary strategy is to persistent in negotiations. But if all else fails, they have a plan of attack ready. "Our goal is not to blow up the situation, but to negotiate," Sefcovic stated.
Sefcovic revealed that the first retaliatory measures for the US tariffs on steel and aluminum imports, announced a month ago, would be unleashed on the following Wednesday. These include the re-introduction of EU special tariffs on US goods such as jeans, bourbon whiskey, motorcycles, and peanut butter. The EU is also working on additional countermeasures in response to the latest tariff package.
In a bold statement, German Federal Economics Minister Robert Habeck warned the U.S. of the endurance of the Europeans. Habeck stated, "We can persevere in this conflict for a very, very long time if we are forced to." The onus is now on the Americans to see reason.
Habeck explained that the United States may be teetering on the brink of a recession with high inflation. "That's actually a dangerous mix for any open society. They'll crack under the pressure sooner rather than later," he declared.
The trade conflict has unveiled its ugly head, casting a dark shadow over the positive February balance of German exporters. Dirk Jandura, President of the Federal Association of Wholesale, Foreign Trade, and Services (BGA), emphasized, "The trade war has begun."
Especially for exporting powerhouse Germany, rising tariffs are toxic. "If negotiations go nowhere, another recession looms for this year," warned Commerzbank chief economist Jörg Krämer. The possibility of a third consecutive year without growth for Europe's largest economy is growing ever closer.
On Trump's list of 185 trading partners, it's the EU that will face a 20% tariff increase on imports. Trump's mission? To correct supposed trade imbalances and move production to the U.S. by applying tariffs. At the same time, these tariff revenues are meant to serve as a partial financing scheme for his costly tax cut promise.
Stay tuned as we navigate this high-stakes game of tit-for-tat called trade war. It's going to be a bumpy ride!
- The EU, wary of escalating trade imbalances, has prepared potential employment policy responses if negotiations with the US fail, as EU Trade Commissioner Maros Sefcovic stated, "Our goal is not to blow up the situation, but to negotiate."
- Amidst the brewing trade conflict and warned consecutive tariffs, the European Commission is actively pursuing the mutual lifting of all tariffs on industrial goods as a means to foster employment in EC countries.
- Growing concerns over Trump's consecutive tariffs and their impact on employment are causing unease not only in the US, but also in EU countries, potentially leading to an imbalance in the global employment market.
