President Donald Trump’s sweeping tariffs on US imports sparked threats of retaliation yesterday, as companies and governments rushed to count the costs from an escalating trade war that threatens to shake up global alliances.
The penalties announced on Wednesday unleashed turbulence across world markets and drew condemnation from other leaders facing the end of an era of trade liberalisation that has shaped the global order for decades.
Trump’s tariffs would amount to the highest trade barriers in more than a century: a 10 per cent baseline tariff on all imports and higher targeted duties on some of the country’s biggest trading partners.
That could jack up the price of everything from cannabis to running shoes to Apple’s iPhone for US shoppers.
Businesses raced to adjust. Automaker Stellantis said it would temporarily lay off US workers and close plants in Canada and Mexico, while General Motors said it would increase US production.
Canadian Prime Minister Mark Carney said the United States had abandoned its historic role as a champion of international economic co-operation.
“The global economy is fundamentally different today than it was yesterday,” he said as he announced a limited set of countermeasures.
Elsewhere, China vowed retaliation for Trump’s 54pc tariffs on imports from the world’s No 2 economy, as did the European Union, which faces a 20pc duty.
French President Emmanuel Macron called for European countries to suspend investment in the United States.
Other trading partners, including South Korea, Mexico and India, said they would hold off for now as they seek concessions.
Washington’s allies and rivals alike warned of a devastating blow to global trade. The burden could fall heaviest on poor countries like Madagascar, which would face a 47pc tariff on vanilla exports.
“The consequences will be dire for millions of people around the globe,” EU chief Ursula von der Leyen said.
Stocks suffered a global meltdown, as analysts warned the tariffs could upend global supply chains and hurt corporate profits. Tech and retail stocks were especially hard hit.
Imports to the United States now face an average duty of 22.5pc, up from 2.5pc last year, according to Fitch Ratings.
Trump says the ‘reciprocal’ tariffs are a response to barriers put on US goods, though his list of targets includes uninhabited Antarctic islands and some of the world’s poorest countries, which now face tariffs approaching 50pc.
Administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, though they cautioned it would take time to see results.
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