Stock markets have fallen in Asia 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.
Trump 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”.
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.
On Monday, Japan’s Nikkei 225 benchmark share index closed more than 4% lower, the Kospi in South Korea ended the day down 3% and the ASX 200 in Australia fell 1.7%. In the UK, the FTSE 100 index opened about 0.9% lower, while Germany’s Dax index and France’s Cac 40 were both down 1%.
Will Butler-Adams, chief executive of Brompton Bicycle, which makes folding bikes, said US tariffs were creating uncertainty. While, at the moment, Brompton’s products are not facing additional taxes, he said the people interpreting the tariffs are trying to establish how much steel in products might have come from outside the US, which might therefore lead to tariffs.
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