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On Tuesday, the United States announced that it would implement a staggering 104 percent duty on imports from China shortly after midnight. This development came as the Trump administration sought to initiate negotiations with various other trading partners affected by President Donald Trump’s extensive tariff strategy.
The news led to a decline in U.S. stock markets, which had previously been buoyed by optimism for potential negotiations aimed at reducing the multitude of trade barriers being constructed around the world’s largest consumer base.
Scheduled discussions are underway with key allies South Korea and Japan, as well as an upcoming visit from Italian Prime Minister Giorgia Meloni.
Despite these talks, the White House confirmed that specific tariffs, reaching as high as 50 percent, will begin at 12:01 a.m. ET as planned. The tariffs on China, in particular, are being ramped up significantly, with the Trump administration responding to Beijing’s countermeasures enacted the previous week. China has strongly condemned these actions, referring to them as “blackmail,” and has pledged to resist the imposed tariffs.
Officials from the administration have indicated that negotiating with China, the world’s second-largest economy, is not a priority.
WATCH | How China is fighting Trump’s tariffs:
U.S. trade war: How China is fighting Trump’s tariffs
The escalating trade conflict is targeting critical sectors within the U.S. as it threatens the foundations of a long-standing global trading framework.
‘No exemptions in the near term’
Concerns about a potential recession are rising due to Trump’s broad tariff policies, which disrupt decades of international trade norms.
White House economic advisor Kevin Hassett appeared on Fox News, noting that the immediate focus is on maintaining relationships with traditional allies and trading partners like Japan and Korea. He indicated that the Trump administration aimed to create “tailor-made” agreements with the nearly 70 countries that have expressed interest in discussions. Jamieson Greer, the chief trade negotiator, has communicated to Congress that efforts to negotiate are being expedited, though no specific deadlines are in place.
Greer also emphasized that there will be “no exemptions or exceptions in the near term,” reaffirming the administration’s approach.
China is preparing for a prolonged conflict over tariffs, with manufacturers expressing concerns about profit margins and contemplating the establishment of new production facilities abroad. Reflecting increased risk assessments, Citi has revised its GDP growth forecast for China for 2025 down to 4.2 percent from an earlier prediction of 4.7 percent.
A recent Reuters/Ipsos poll indicates that approximately 75 percent of Americans foresee an increase in prices due to the forthcoming tariffs.
Consumers Preparing for Price Hikes
Micron Technology has informed its clients of an impending tariff-related surcharge set to take effect on Wednesday. Meanwhile, U.S. apparel retailers are delaying their orders and putting hiring plans on hold. For instance, running shoes manufactured in Vietnam, currently priced at $155, could surge to $220 once the 46 percent tariff on products from that country is enforced, as per industry sources.
With mounting concerns about future costs, consumers are proactively stocking up on essentials. “I’m buying double of whatever — beans, canned goods, flour, you name it,” shared New Jersey resident Thomas Jennings while shopping at Walmart.
After several challenging days for investors, stock markets experienced some stabilization on Tuesday, with numerous business leaders, including those close to Trump, advocating for a shift in tariff strategy.
European stocks recovered from 14-month lows following four consecutive sessions of significant losses, while global oil prices regained stability after hitting four-year lows. Following the announcement of the tariffs on China, primary indexes on Wall Street saw an initial rise before declining.
WATCH | Global markets rebound temporarily:
Global markets rebound after days of losses over Trump tariff policy
Markets in Asia, Europe, and North America found some upward momentum on Tuesday after a turbulent period of declines that followed Trump’s tariff announcements. Meanwhile, China has asserted its commitment to “fight to the end” while beginning dispute resolution consultations with the World Trade Organization.
Source
www.cbc.ca