Trump unleashes tariffs, sparking fears of global trade war
President Donald Trump plans to announce the details of implementing new tariffs on products imported into the United States today. The regulations will take effect immediately upon the announcement, which could lead to the onset of a global trade war. Stock markets are already reacting to these announcements.
The so-called "day of liberation," as the administration refers to today's date, will bring a detailed plan for imposing tariffs, which are expected to reach the highest level since 1946. According to the administration, the new regulations aim to reduce the U.S. trade deficit of $918 billion and restore jobs in American industry.
Eswar Prasad, a professor at Cornell and a scholar at the Brookings Institution, quoted by Barrons.com, does not doubt that the era of free trade is ending. According to the economist, even if the tariff war loses momentum, its economic effects will be long-lasting.
The White House's tariff plan
The White House announced that the planned tariffs will cover around 200 trade partners. The potential base rate is 10 percent, which may increase to 20 percent for countries with the largest trade deficit with the U.S. The list of countries that could be most affected by the new tariffs includes the European Union, China, Vietnam, and India.
The decision regarding Mexico and Canada, countries covered by the USMCA agreement, will be particularly interesting for observers. According to analysts at Beacon Policy Advisors, the administration may maintain the suspension of tariffs on goods covered by this agreement while simultaneously introducing so-called retaliatory tariffs.
According to Bloomberg reports, Chinese authorities are already taking steps to prevent some Chinese firms from investing in the U.S. Analysts interpret this as an attempt to create negotiating space in tariff talks.
This is how the markets are reacting to U.S. plans
Trump announces "Liberation Day"—from today, new tariffs on imports to the U.S.
President Donald Trump plans to announce the details of implementing new tariffs on products imported into the United States today. The Trump administration's policy will take effect immediately upon the announcement, likely leading to the onset of a global trade war.
According to experts, the so-called "Liberation Day," as the administration refers to today's date, will bring a detailed plan for imposing tariffs, which are expected to reach the highest level since 1946. President Trump has previously preferred a "big, simple" tariff system, which his administration claims will reduce the U.S. trade deficit of $918 billion and restore jobs in American industry.
Eswar Prasad, a professor at Cornell and a scholar at the Brookings Institution, states that "global trade is entering an era of protectionism, with the era of free trade coming to an end as the Trump administration introduces tariffs." According to the economist, even if tariff wars weaken as their economic consequences become more evident, companies worldwide face a more uncertain and unstable trade environment.
The White House's Tariff Plan
The White House announced that the planned tariffs will cover around 200 trade partners. The potential base rate is 10 percent, which may increase to 20 percent for countries with the largest trade deficit with the U.S. The list of countries that could be most affected by the new tariffs includes the European Union, China, Vietnam, and India.
The decision regarding Mexico and Canada, countries covered by the USMCA agreement, will be particularly interesting for observers. According to analysts at Beacon Policy Advisors, the administration may maintain the suspension of tariffs on goods covered by this agreement while simultaneously introducing so-called retaliatory tariffs.
According to Bloomberg reports, Chinese authorities are already taking steps to prevent some Chinese firms from investing in the U.S. Analysts interpret this as an attempt to create negotiating space in tariff talks.
This is how the markets are reacting to U.S. plans
European financial markets reacted negatively to the announced U.S. tariff introduction. The German DAX index lost 1.29 percent in value, reaching 22,244 points. The biggest declines were seen in Bayer (-3.99 percent), Sartorius AG Vz (-3.94 percent), and Rheinmetall (-3.69 percent).
The French CAC 40 also suffered a 0.6 percent decline. The worst performers were Airbus Group (-3.42 percent), Sanofi (-2.62 percent), and Edenred (-2.33 percent). On the Warsaw Stock Exchange, the WIG20 index lost 0.41 percent, closing at 2,724 points.
Among the companies in the WIG20 index, declines predominated. The worst performers were banks and retail companies—PKOBP lost 1.45 percent, ALIOR 1.22 percent, BUDIMEX 1.14 percent, and CCC 1.11 percent. Only three companies ended the day in positive territory—retail represented by DINOPL gained 1.21 percent, ZABKA rose by 0.61 percent, and PZU slightly by 0.03 percent. 17 out of 20 companies in the Warsaw blue-chip index ended the session in the red.
The value of the Polish currency did not experience significant fluctuations in light of the information about the new U.S. tariffs.
The French CAC 40 also suffered a 0.6 percent decline. The worst performers were Airbus Group (-3.42 percent), Sanofi (-2.62 percent), and Edenred (-2.33 percent). On the Warsaw Stock Exchange, the WIG20 index lost 0.41 percent, closing at 2,724 points.
The value of the Polish currency did not experience significant fluctuations in light of the information about the new U.S. tariffs.
Concerns grow in the U.S
Economists emphasize that uncertainty related to the introduced tariffs might affect inflation in the U.S. According to market analyst Brian Swint, "one of the main negative effects of the tariffs is that they will drive inflation, as they increase the cost of doing business".
At the same time, the expert adds that the exact impact is difficult to predict, as the tariffs will not apply to all goods, and sellers may partially absorb the higher costs instead of passing them on entirely to consumers.
The metric system is commonly used in Canada, so no changes to the metric units are necessary in this context. The time has not been specified explicitly in the text, so there are no time adjustments to Eastern Time.
