New tariffs initiated by Trump, set to commence imminently.
Fresh Take:
President Donald Trump declared on Wednesday that he might reimpose "reciprocal" tariffs on several countries within a span of two or three weeks, potentially reigniting the global trade war. Stirring up a storm, Trump said in an Oval Office ceremony, "In the end, I think what's going to happen is, we're going to have great deals. If we don't have a deal with a company or a country, we're going to set the tariff."
The statement marks a point of possible escalation in the ongoing global trade war, which has raised concerns of a US and a global recession. Before trumpeting his intention, Trump had paused his so-called reciprocal tariffs back in April, allowing countries to negotiate with the administration. Nearly 90 to 100 countries have reportedly offered to negotiate deals, despite the challenging task facing trade negotiators to meet the deadline.
What new tariffs Trump will levy on countries who fail to secure a deal within the coming weeks remains uncertain, as does whether these would permanently replace the paused reciprocal tariffs or serve as a temporary interim tariff. For now, the United States maintains a 10% universal tariff on most goods imported to America, as well as higher rates for certain products.
The rollercoaster stance of Trump on tariffs has left businesses and consumers in a state of suspense, and markets have suffered accordingly. Despite a two-day market rebound, the S&P 500 has lost $7 trillion in value since hitting a record high in mid-February.
Major organizations have cautioned of a global economic slowdown due to Trump's import levies, which threaten to reshape global trade and divert money flows worldwide.
Up in the Air with China
Even as the reciprocal tariffs on several nations were paused, the trade war between the US and China intensified significantly over the last couple of months, sparking alarm among Wall Street and economists alike. Many major banks predicted that the staggering tariffs, in tandem with China's major retaliatory tariffs on US goods, would plunge the US and the global economy into a recession.
US Treasury Secretary Steven Bessent confirmed at a private investment conference hosted by JP Morgan Chase on Tuesday that the trade war with China is unsustainable. Predicting a de-escalation in the near future, Bessent specified that tariffs are essentially embargos on each nation, halting business transactions. Trump echoed this sentiment on Wednesday.
"It's 145%. That's very high," Trump said of China's high tariffs on US goods. "But I haven't brought it down. It basically means China is not doing any business with us, essentially, because it's a very high number."
Though Trump claimed that the substantial tariffs would be reduced soon, Bessent forecast that they wouldn't be eliminated completely. Instead, he aimed for a rebalancing of trade, rather than a complete decoupling between the United States and China, specifying a timeframe of between two and three years to restore normal trade.
Stocks soared on Bessent's remarks on Tuesday and continued to rise on Wednesday. US stock futures were relatively stable after hours on Wednesday.
China responded to the Trump administration's newfound willingness for a deal with a strongly worded statement, advocating for a dialogue based on equality, respect, and mutual benefit. Echoing this sentiment, the Chinese Foreign Ministry Spokesperson Guo Jiakun told reporters Wednesday, “Our doors are open, if the US wants to talk. If a negotiated solution is truly what the U.S. wants, it should stop threatening and blackmailing China and seek dialogue based on equality, respect, and mutual benefit."
- President Trump announced that he might reinstate "reciprocal" tariffs on various countries within the next two to three weeks, reviving the global trade war.
- The unpredictable approach of Trump on tariffs has left businesses and consumers in limbo, resulting in a declining stock market, as the S&P 500 has lost $7 trillion in value since reaching a record high in mid-February.
- According to US Treasury Secretary Steven Bessent, the ongoing trade war between the US and China is unsustainable but is expected to de-escalate in the near future.
- In a private investment conference with JP Morgan Chase, Bessent predicted that the substantial tariffs between the US and China won't be eliminated completely but would be rebalanced over a two to three-year timeframe to restore normal trade.
- Trump declared that China's high tariffs on US goods at 145% are extremely high, effectively severing business transactions between the two nations.
- Responding to the US administration's newfound openness for negotiations, China advocated for dialogue based on equality, respect, and mutual benefit, stating that their doors are open for discussions.