US President Donald Trump has implemented long-debated counter-tariffs on nearly all of the United States' trading partners, sparking concerns among experts that this move could destabilise the global economic system and ignite a trade war.
Despite these fears, leaders from several affected countries have expressed their desire to avoid escalating tensions into a full-blown trade conflict.
However, responses vary widely as nations weigh their options and formulate strategies to mitigate the impact of these tariffs.
Trump’s tariff policy: A global impact
Trump announced the tariffs in the Rose Garden of the White House last Wednesday (April 2). Regardless of whether a country is an ally or adversary, the US has imposed tariffs on almost all nations. During his election campaign, Trump vowed to retaliate against countries that impose tariffs on American goods, and he has now fulfilled that promise.
In an unusual twist, Trump claimed that he had shown “generosity” by imposing tariffs at half the rate levied by other nations. For instance, Bangladesh imposed a 74 per cent tariff on American products, while the US countered with a 37 per cent tariff on Bangladeshi goods. Additionally, the new policy establishes a baseline minimum tariff of 10 per cent on all imports.
Global reactions to Trump’s tariffs
UK seeking dialogue
Despite being slapped with a 10 per cent tariff, the UK remains cautious. British Trade Minister Jonathan Reynolds emphasised that Washington remains a close ally. The UK is exploring ways to negotiate a trade deal to minimise the impact of the tariffs.
“No one wants a trade war,” Reynolds stated. While expressing a preference for dialogue, he also confirmed that the UK administration is prepared to take necessary measures to safeguard national interests if negotiations fail.
Japan prioritising bilateral relations
Japan echoed a similar sentiment. Chief Cabinet Secretary Yoshimasa Hayashi noted that retaliatory measures could harm the US-Japan bilateral relationship. Tokyo plans to analyse the situation thoroughly before deciding on its next steps, prioritising diplomacy over confrontation.
Italy criticises with caution
Italian Prime Minister Giorgia Meloni criticised Trump’s initiative, stating that it would neither benefit the US economy nor help the targeted nations. In a Facebook post, she warned that such unilateral actions could weaken Western economies and empower rival global powers. Italy aims to negotiate an agreement to prevent escalation into a trade war.
Brazil and Canada preparing countermeasures
In contrast, Brazil has taken a firmer stance. The Brazilian parliament has passed legislation imposing counter-tariffs in response to Trump’s 10 per cent levy. Similarly, Canadian Prime Minister McCarthy has signalled his intention to follow suit, warning of retaliatory tariffs.
China responds with retaliation and diplomacy
China’s Commerce Minister condemned Trump’s tariffs and announced counter-tariffs as a reciprocal measure. Beijing has urged Washington to resolve trade disputes through dialogue rather than unilateral actions, emphasising the importance of cooperation with partner countries.
Mexico monitors before acting
Mexican President Claudia Schiffer has adopted a wait-and-see approach. She stated that Mexico will monitor the effects of Trump’s tariffs before deciding on a course of action. “We don’t have to mirror every move,” Schiffer remarked, adding that Mexico’s priority is strengthening its economy regardless of external pressures.
Strategies to mitigate damage
The United States imports a significant portion of its goods from Asian countries, many of which are major exporters. To cushion their economies from the adverse effects of Trump’s tariffs, large exporting nations are extending support to industries such as automobile manufacturing and other key sectors.
South Korea prefers proactive measures
Trump has imposed a 25 per cent tariff on South Korean products. South Korea’s Commerce Minister revealed that Prime Minister Han Duck-soo has instructed officials to assess the economic impact and develop strategies to minimize damage. Efforts are underway to mitigate the negative consequences of these additional tariffs.
China for longstanding resistance
Since Trump first imposed tariffs on Chinese goods during his presidency, Beijing has consistently responded with counter-tariffs. This time is no different, as China has once again announced retaliatory measures. Simultaneously, Beijing continues to advocate for resolving trade disputes through negotiation rather than unilateral actions.