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01-04-2025
WASHINGTON: Stock markets have fallen in Asia and Europe after President Donald Trump suggested that new tariffs he is set to announce this week will hit all countries, not just those that have the biggest trade imbalances with the US.
Trump made the comments as he prepares to unveil a massive slate of import taxes on Wednesday, in what he has called America’s “Liberation Day”.
The measures will come on top of tariffs already imposed by Washington on aluminium, steel and vehicles, along with increased levies on all goods from China.
“You’d start with all countries,” Trump told reporters on Air Force One. “Essentially all of the countries that we’re talking about but he said his administration would be “far more generous” and “kinder” than the countries had been to the US.
With 48 hours to go before the tariffs come into force, the UK is still locked in talks with the US about an exemption.
On Sunday, Downing Street said that Prime Minister Sir Keir Starmer had had “productive negotiations” with Trump in a phone call, adding that talks would “continue at pace”.
On Saturday, government sources had said that the UK would not hesitate to impose its own tariffs on the US if needed.
Other jurisdictions, such as the European Union and Canada, have already said that they are preparing a range of retaliatory trade measures.
Kevin Hassett, director of the National Economic Council, recently told the Fox Business channel the tariffs would focus on 10 to 15 countries that have the worst trade deficits with the US, but did not name them.
Trump sees trade taxes which in this case would be paid by the US companies importing goods as a way of protecting the American economy from unfair competition and as a bargaining chip for getting better trading terms.
Concerns about a trade war are unsettling markets and creating fears of a recession in the US.
US President Donald Trump has introduced a series of tariffs targeting goods from other countries.
He argues the measures which make imports more expensive will help US manufacturers and protect jobs. However, prices could go up for consumers.
Several tariffs announced by Trump have been delayed, amended or scrapped.
What are tariffs and how do they work?
Tariffs are taxes charged on goods imported from other countries.
Those announced so far target products including cars, aluminium and steel, and goods from Canada, Mexico and China.
Typically, tariffs are a percentage of a product’s value. For example, a 25% tariff on a $10 (£7.76) product would mean an additional $2.50 charge.
Companies that bring the foreign goods into the country have to pay the tax to the government.
Firms may choose to pass on some or all of the cost to customers.
Why is Trump using tariffs?
Tariffs are a central part of Trump’s economic vision. He says “tariff” is his favorite word.
He argues the taxes will encourage US consumers to buy more American-made goods, boosting the country’s economy and increasing the amount of tax raised.
Trump wants to reduce the gap between the value of goods the US imports and those it exports to other countries.
For example, the US had a trade deficit of $213bn (£165bn) with the European Union (EU) in 2024, something Trump has called “an atrocity”. (Int’l News Desk)
