and sparking fear of price hikes in the world’s largest consumer market, also stirring up a global economic downturn.
Trump announced on Wednesday a list of penalties that also triggered a plunge in the world financial markets, drawing condemnation from other leaders who are reckoning with the end of a decades-long era of trade liberalization.
But, as expected, some backlash from the White House also came regarding whether those tariffs were meant to be on the long term or were just a strategy to win concessions, Trump stating, “give us great power to negotiate.”.
The U.S. tariffs would also amount to the highest trade barriers in more than a century, leading to a 10% baseline tariff that can be observed on all imports and higher targeted duties on some of the country’s largest trading partners.
Even more so, as a response, this could jack up the prices for U.S. shoppers in everything from running shoes to food to Apple’s iPhone. A high-end iPhone could cost nearly $2,300 if Apple passes the costs on to consumers based on projections from Rosenblatt Securities.
Businesses also raced to adjust. The automaker industry has also faced some issues, mentioning that Stellantis would lay off workers temporarily from the US and even close plants in Canada and Mexico, while GM, General Motors, said that it would increase U.S. production.
JP Morgan, the investment bank, also said that it now sees a 60% chance of the global economy entering recession by the end of the year, coming from 40%.
Mark Carney, the Canadian Prime Minister, said that the US has abandoned its historic role as a champion of international economic cooperation. He also said, “The global economy is fundamentally different today than it was yesterday,”.
China also vowed retaliation for Trump’s 54% tariffs on imports from the world’s No. 2 economy, as did the European Union, which is now facing a 20% duty. Emmanuel Macron, the French President, called for European countries to suspend investment in the United States. Other trading partners such as Japan, South Korea, India, and Mexico said that they would hold off on any retaliation for now as they seek concessions.
Kristalina Georgieva, the Managing Director of the IMF, called on Washington and its trading partners, saying the tariffs “clearly represent a significant risk to the global outlook at a time of sluggish growth,”.
After the US Commerce Secretary Howered Lutnick and senior trade adviser Peter Navarro said that the president would not back off, adding that the growing tariffs are not a negotiation, President Trump appeared to contradict them, telling reportes that “The tariffs give us great power to negotiate. Always have. I used it very well in the first administration, as you saw, but now we're taking it to a whole new level”.
Among companies losing shares, we can see Dow, which lost nearly 4%, S&P 500, which lost almost 5%, and Nasdaq, which fell nearly 6%. American companies with a significant overseas production also took a hit; Nike shares dropped by 14%, and Apple fell by 9%, reported Reuters.
Trump's response was that the tariffs are due to barriers that are put on US goods, and Vice President JD Vance said, “That's fundamentally what this is about, the national security of manufacturing and making the things that we need, from steel to pharmaceuticals.”
James Lucier, the founding partner from Capital Alpha, also talked about the tariffs, saying, “The tariff plan does not appear to be well thought-out. Trade negotiations are a highly technical discipline, and in our view, these proposals do not offer a serious basis for negotiations with any country,".
Trump has also slapped a 24% tariff on Japan and a 25% tariff on South Korea, both the places of major US military bases. Canada and Mexico also face 25% tariffs on many goods, and now also face separate tariffs on auto imports.
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