WASHINGTON: Donald Trump, the US President’s decision of imposing 10 per cent tariff on most goods imported to the United States, as well as higher duties on dozens of countries from rivals to allies, has intensified a global trade war that threatens to stoke inflation and stall growth.
The sweeping duties announced against the serene backdrop of the White House Rose Garden on Wednesday immediately unleashed turbulence across world markets and drew condemnation from other leaders now faced with the end of decades of trade liberalisation that have shaped the global order.
According to Forbes, the US imposed a 29pc reciprocal tariffs on Pakistan, which charges the US 58pc.
As Asia awoke to the news on Thursday, Japan’s Nikkei hit an eight-month low while US and European stock futures dropped sharply following weeks of volatile trading. US stocks have erased nearly $5 trillion of value since mid-February.
China, the world’s second-largest economy, faced with a fresh 34pc tariff on top of the 20pc Trump previously imposed, urged the United States to immediately cancel its latest levies and vowed countermeasures.
The US slapped a 26pc tariff on imports from India in a setback to the South Asian nation’s expectation of getting relief from Trump’s global trade policy. The Trump administration, however, exempted pharmaceutical exports from the tariff, bringing cheer to India’s pharma industry.
Outside economists have warned that tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average US family by thousands of dollars.
Canada and Mexico, the two largest US trading partners, already face 25pc tariffs on many goods and will not face additional levies from Wednesday’s announcement.
Even some fellow Republicans have expressed concern about Trump’s aggressive trade policy.
Within hours of Wednesday’s announcement, the Senate voted 51-48 to approve legislation that would terminate Trump’s Canadian tariffs, with a handful of Republicans breaking with the president. Passage in the Republican-controlled US House of Representatives, however, was seen as unlikely.
Trump’s top economist, Stephen Miran, told Fox Business on Wednesday that the tariffs would work out well for the US in the long run, even if they cause some initial disruption.
“Are there going to be short-term bumps as a result? Absolutely,” Miran, the chairman of Trump’s Council of Economic Advisors, told the network’s ‘Kudlow’ programme.
The reciprocal tariffs do not apply to certain goods, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals that are not available in the United States”, according to a White House fact sheet.
Read more: Trump Imposes 29pc Tariff On Pakistan, Signs Reciprocal Tariff Order
