Infographics. Photos: Time Ukraine Israel
On Wednesday, 9 April, new trade duties came into force in the United States, which effectively marks the beginning of a new phase of global economic confrontation. US President Donald Trump signed a decree imposing additional duties on imports of dozens of product categories from partner countries, including China, the EU, Japan, South Korea, Vietnam and others.
The key blow is to China
The US authorities imposed a record 104% duty on Chinese goods, almost doubling the tariff in just a week (from 54%). Beijing responded by saying that it views the US actions as economic blackmail and is preparing symmetrical measures.
The markets react immediately:
- TheS&P 500 index lost almost $6 trillion in capitalisation, the biggest drop in the last 70 years.
- TheNASDAQ lost more than 5% in just two days.
- Shares of Tesla, which is actively working with China, lost more than 12%.
- Apple, which manufactures a large part of its products in China, has lost $150bn.
- Amazon and Meta also suffered significant losses amid fears of a decline in demand.
Oil is getting cheaper: Brent fell to $61/barrel, the lowest price since 2020.
European indices also fell:
- Ibex (Spain) -2.0%.
- FTSE 100 (London) -2.2%
- DAX (Germany) -2.3%
- CAC 40 (France) -2.4%.
Europe prepares for dialogue, but with caution
The European Commission has said it is ready to negotiate with the US, but Trump has made a tough demand: The EU must buy $350bn worth of US energy resources as part of a new energy deal.
“America will no longer allow itself to be exploited,” President Trump said in a speech to the Republicans.
Asian markets are also on edge:
- Nikkei 225 (Japan) -3.9%
- Kospi (South Korea) -1.8%.
- Hang Seng (Hong Kong) -0.4%.
However, Chinese indices rose:
- Shanghai Composite +1.1%.
- Shenzhen +2.2%.
This happened amid Beijing’s announcement of increased government support for equities and stabilisation of the stock markets.
Analytics: What’s next?
Economists warn of a real risk of a global recession. This summer, American consumers may feel a rise in prices for consumer goods such as footwear, electronics and pharmaceuticals.
🔬 F or the first time, even imported medicines, a category that has been spared by all trade wars so far, may be subject to sanctions.
“This is a radical turn in US foreign policy. If the EU, Japan and other allies don’t agree with Trump, we will see a new global trade landscape divided by customs barriers,” said a Bloomberg analyst.
Trump does not stop:
On Tuesday evening, he said that he would soon announce new “large-scale” tariffs – this time on pharmaceuticals. He also threatened Japan over the “artificial depreciation of the yen”.
The United States is already in talks with South Korea, Japan, Italy, and Vietnam to review trade relations. According to Reuters, the talks may concern not only tariffs but also exchange rates.
Author: Aleksandr Potetiuiev
