Author: The New York Times
Published on: 08/04/2025 | 00:00:00
AI Summary:
Markets in Asia and Europe slumped as U.S. Imposes Punishing Tariffs President Trump’s latest moves included a 104 percent tariff on Chinese goods. China hit back with its own levies, which will kick in at noon Eastern time. The flurry of moves has heightened fears that the trade war could lead to a global recession. Losses mount in stock markets around the world since Mr. Trump announced this latest round of tariffs last week. The market rout reflects deepening concern that Mr. Trump’s tariffs could disrupt global supply chains, fuel inflation and set off a severe economic downturn. Many world leaders have rushed to negotiate with the Trump administration, scheduling phone calls and sending delegations to Washington. Governments including Taiwan and Vietnam have offered concessions in hopes of avoiding the tariffs. Yields on U.S. Treasury rose to as high as 4.5 percent, up from 3.9 percent a few days ago. In the immediate aftermath of Mr. Trump’s tariff announcement, bond yields actually drifted down, even as the stock market plummeted and dollar weakened. Now, that safe-haven status may be crumbling, according to some analysts. China’s Foreign Ministry vows that Beijing will “fight to the end” For years, the world’s two biggest powers have flirted with the idea of an economic decoupling. The acceleration this week, in both actions and words, of their trade relationship’s deterioration has made the prospect of such a divorce seem closer than ever. On Wednesday, the Trump administration carried out its threat to increase tariffs on Chinese exports by an additional 50 percent unless China rescinded its own re Chinese censors appear to be blocking social media searches of hashtags referred to the number 104 as in the size of the American tariffs. To be sure, a U.S.-China decoupling is far from becoming reality. Chinese and American companies like TikTok and Starbucks are both still entrenched in each other’s countries. China has tried to downplay its vulnerability to the economic chaos unleashed by the Trump administration. China says it has reduced its reliance on U.S. Markets for its exports and that its economy is getting more self-sufficient. The fallout from the trade disruption will hurt the United States, which relies on China for all sorts of manufactured goods. China’s exports compounds the challenging task of bringing back foreign investment. Mr. Xi has tried to woo foreign investors back, hosting a group of executives from overseas last month in Beijing. Beijing’s strategy now is to push back at the United States and hope that Mr. Trump succumbs to domestic pressure to reverse course. Influential bloggers have been allowed to weigh in on the crisis and suggest ways to retaliate against the united States. China President Trump’s tariffs are causing considerable anxiety in the garment manufacturing district of Guangzhou in southeastern China. So far, wages have not fallen, as factories continue producing for the domestic Chinese market. But that market is flooded with clothes and prices are falling, so factories find little or no profit in selling to it. Aiming to shrink trade deficits with major trading partners could reduce demand for U.S. Assets. The European Union plans to vote on Wednesday afternoon on its first retaliation measures. The list up for consideration is a slightly trimmed down version of one that was announced in mid-March in response to Mr. Trump’s steel and aluminum tariffs. E.U. Officials have spent recent weeks consulting with policymakers and industries across the 27-nation bloc in an effort to minimize how much the countermeasures would harm Europe. Europeans are critical to technology giants’ bottom lines. But whether such an aggressive services retaliation will actually happen is still unclear. For now, the goal is to slowly and deliberately roll out a response. It would be difficult to design in a way that would not cost Europeans. April 9, 2025, 4:34 a.m. ET2 hours ago Reporting from Paris The tumult has also hit government bonds as investors move away from what are traditionally haven assets in times of uncertainty. The yield on 30-year U.S. Treasuries has jumped to 4.8 percent, up from 4.4 percent at the end of last week. Mr. Thomas spoke on the sidelines of a summit of finance ministers of the Association of Southeast Asian Nations. His comments were reflective of the confusion, concern and quiet anxiety that clouded the gathering as the region grappled with the implications of Mr. Trump’s tariffs on its export-driven economies. The new U.S. Taxes on the region’s exports — which range from apparel to computer chips — has raised the stakes. It remains unclear how the new tariffs will reverberate across the regions. The host of the summit projected calm. Malaysia, whose exports will be subject to a 24 percent tariff, is also planning talks in Washington. India has spent most of a week trying to find reasons for hope after the shock of being hit with a 27 percent blanket rate. One of the best was the fact that the global pharmaceutical industry was excluded from the first round of tariffs. Last year India exported almost $13 billion worth of drugs, many of them generics. The next biggest exporter of generic drugs is China, which is suddenly facing higher tariffs than any other country. Chinese state media said Xi had met with a small group of top officials to discuss how to bolster ties with China’s neighbors. Mr. Trump’s harshest tariffs went into effect on products that are made in China and some of its rising manufacturing rivals in Southeast Asia: Vietnam, Cambodia, Thailand and Indonesia. The Philippines may be the only government in the world that has called the Trump administration’s tariffs “good news” At least half a dozen companies with customers in the United States have made inquiries in the last few weeks with Mr. Liu’s factory and his neighbors. Some have made commitments to shift production. The Philippines faces a host of challenges that make it a more difficult place to get a factory going quickly. Raw materials like rubber and steel are difficult to procure and more expensive than in countries like China. HYS started shipping two containers’ worth of raw materials from China each week. It costs $820 a month employ someone in China; in the Philippines that same worker costs $274. The decision to move production to the Philippines paid off this week as the Trump administration raised tariffs on Chinese goods to more than 100 percent. A box of metal parts revealed his morning’s work, dozens of parts used to hold wires on a Honda motorbike. At the Fong Shann Printing factory a few blocks away, four companies have visited in recent days to talk about contracting the factory to make the boxing materials for products they will start producing in the Philippines. On a recent day, three design and quality control employees were printing and reading the instruction manual for a scientific calculator sold by Texas Instruments. The change, which will affect around half of all the products that Arkray sells, will take a month to make happen. "The Philippines was 0 percent but they will now charge 17 percent," Mr. Anai says. China's 400 or so products will need to be registered differently. "In Chinese people’s genes, we never fear any risks, challenges, difficulties or contradictions," one piece says. Other pieces did not directly reference the tariffs but still touted the strengths of the Chinese economy. On Wednesday afternoon, Chinese state media published his first public remarks since the latest escalation in the trade war. Some users described worries about trade war’s repercussions, voices expressing dissent or concern were generally limited. Many individual posts that mentioned the figure were still visible, even as the hashtags themselves were blocked. But the government likely wanted to direct attention away from the specifics of the high tariff rate, because of the severe implications it could have for the Chinese economy. Reporting from New Delhi President Trump spooked India’s pharmaceutical industry on Tuesday. He said he would be slapping new tariffs on one of the nation’s growing industries. The industry had been exempted in the first round of tariffs. South Korea’s interim leader, Prime Minister Han Duck-soo, on Tuesday suggested that his country was ready to make compromises aimed at pleasing Mr. Trump. Mr. Han also said his country is willing to cooperate with the United States in shipbuilding and liquefied natural gas, as well as reducing South Korea's $55.7 billion trade surplus. Trump's office said the United States reconfirmed its commitment to the military alliance with South Korea. But after the call, Mr. Trump also said he and Mr. Han talked about “payment for the big-time military protection we provide to South Korea” April 9, 2025, 1:31 a.m. ET5 hours ago Reporting from Ho Chi Minh City, Vietnam. ET6 hours ago Reporting from Seoul South Korea’s most famous products are facing massive U.S. Tariffs. The government is stepping in to make sure that automakers can access more cheap loans to weather the crisis. And it’s cutting taxes domestically on vehicle purchases, to boost local demand. Reporting from Tokyo Prime Minister Shigeru Ishiba of Japan has tapped one of his closest aides to lead negotiations in Washington. The biggest challenge is figuring out who to negotiate with in the Trump administration. On May 2, U.S. Officials will start collecting tariffs on small packages from China and Hong Kong that have long been exempt. The panic is palpable, with stock markets in Asia plummeting on Wednesday morning. The yield on 10-year U.S. Treasuries jumped to 4.38 percent. Stocks in Asia slumped on Wednesday, following a day on Wall Street. Benchmark indexes were down more than 3 percent in Japan and almost 2 percent in South Korea. Stocks listed in Hong Kong were roughly flat, while those listed in Shanghai gained slightly. The Stoxx Europe 600 dropped 2.6 percent in early trading. In the United States, the S&P 500 ended trading on Tuesday near a bear market. Administration officials appear to leave the door open for negotiations that could ultimately defuse the trade war. But White House officials have sought to set a high bar for what the president is willing to accept. Japan emerged as the first major economy to secure priority tariff negotiations. In China’s case, tariffs are piling on previous tariffs, and import taxes on its goods will be at least 104 percent. The growing trade tensions have taken a stark toll on financial markets, with the S&P 500 down more than 12 percent since Mr. Trump unveiled his tariff plan on April 2. But economists are increasingly warning that the United States could slip into recession if tariffs continue to escalate. President and advisers say their goal is to make the tariffs so painful that they force companies to make their products in the United States. They argue that this will create more American jobs and push up wages. The president also maintains that tariffs will rake in huge sums of revenue that the government can use to pay for tax cuts. China is imposing 34 percent tariffs on all U.S. Products, matching earlier levies from Mr. Trump. It also barred 11 American companies from doing business in China. The European Union is responding to President Trump’s sweeping trade war. South Korea convened an emergency task force and vowed to “pour all government resources to overcome a trade crisis” Vietnam offered to lower its tariff rate on American exports to zero, in exchange for a similar move by the United States. Australia said it would not respond with retaliatory tariffs, as prime minister Anthony Albanese,. As of Tuesday, the index closed 18.9 percent below its mid-February record, having tumbled more than 12 percent just in the days since Mr. Trump announced his new Trump’s 25 percent tariffs on imported vehicles are already sending tremors through the auto industry. Nearly half of all vehicles sold in the United States are imported, as well as nearly 60 percent of the parts used in vehicles assembled in the united States. In total, American households would pay $500 to $600 more, on average, as a result of the tariffs. 1789: At its founding, the United States relied heavily on tariffs to finance the federal government and protect domestic manufacturers. These were labeled the “Tariff of Abominations” by Southern states, whose economies relied on exporting raw materials and importing manufactured goods. 1930: The Smoot-Hawley Tariff Act of 1930 was enacted after the stock market crash of 1929, in an attempt to protect U.S. Businesses. Trump’s top trade official defended the administration’s aggressive tariff moves. Trade tensions have begun to force a rethink about how much investors and businesses should bet on the United States. But for Lesotho, the impact of a 50 percent tariff is enormous.
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