The global economy is on edge as Donald Trump, the President of the United States, urges Americans to be patient with the effects of his new trade policies. Trump says the outcome will be worth it.
Trade Tensions Rise
Trump introduced a 10% “baseline tariff” on all goods imported into the US. He also plans to impose “reciprocal tariffs” on several countries with which the US has a significant trade deficit. This move has sparked concerns worldwide.
The new tariffs have already started to take effect. A 10% tax on all imported goods began on April 5. The reciprocal tariffs will start on April 9 and will affect around 60 countries, including the European Union, Japan, Thailand, and China.
Global Reaction
The news has sent shockwaves through the global economy. Stock markets have been severely affected, with the Wall Street market losing over $6.6 trillion in value since Trump announced the tariffs on April 2.
China, which will face a 34% tariff increase, has announced plans to impose its own tariffs on US goods at the same rate. China will also file a complaint against the US with the World Trade Organization (WTO) and restrict the export of rare earth minerals used in high-tech electronics and medicine.
Other countries have also responded to Trump’s tariffs. The European Union has said it will take a calm and united approach to negotiations but will not stand idly by. France and Germany suggest the EU should respond by imposing tariffs on US tech companies. Japan’s Prime Minister has called for calm action after the US imposed a 24% tariff on Japanese goods.
Trump claims he has had productive talks with Vietnam, which has offered to take measures to reduce the tariff rate from 46%. The US has also started imposing a 25% tax on all foreign-made cars imported into the country, affecting companies like Stellantis, which has temporarily halted production at some plants in Canada and Mexico.
