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Donald Trump has pushed the world into a full-scale trade war and denied market disruption as swept tariffs were enacted on dozens of US trading partners.
With no last-minute reprieve from the White House, the president’s so-called mutual tariffs came into effect Wednesday in the middle of the night in Washington. They include a 104% collection against China, which cuts trade between the two largest economies in the world.
US tariffs have shown a significant reversal of decades of liberalization in the global economy, and in a sustained way, lead to a complete reshaping of global trade patterns.
Asia has deepened its market sales, extending the defeat that began last week when Trump first announced tariffs on “liberation day.” The US Treasury Department, dollars and stock futures all fell early Wednesday.
The historic decision to impose tariffs limits the aggressive trade policies Trump pursued since taking office, seeking to reshape the global economic order the US president has “destroyed” America for decades.
White House officials, including Treasury Secretary Scott Bescent, tried to discuss the possibility of trade negotiations with South Korea, Japan and other countries. This is the message that gave investors hope that Trump could ease pressure from billionaire allies, trading partners and Republicans.
At a fundraising event for Republicans in Congress on Tuesday night, Trump spoke rebelliously, saying that other countries “want to do business with us,” but the US “not necessarily” needed an agreement and was “how happy we are.” He added: “I know what the hell I’m doing.”
White House spokesman Karoline Leavitt said that “being enforced at 12.01am” to punish Beijing for US retaliation would add an extra 50% tariff on China.
The $2.9 billion US Treasury Department has also been subject to rising sales pressure over the past two days, bringing high long-term borrowing costs. “The market price action was dramatic,” Goldman Sachs said in a note to his client.
“The estimated ‘shock’ on market views using joint US equity and bond movements is consistent with a major downgrade to US growth views. ”
Since then, market value has been wiped out by 6.2TN from the S&P 500 index, with analysts warning about US spiral inflation and slowing the global economy.
The oil market has fallen into the hopes of a sharp slowdown in global trade. International benchmark Brent Crude fell by 4.1% in Asian trading on Wednesday, reaching $60.26, the lowest barrel since the depth of the Covid-19 pandemic in early 2021.
The US benchmark West Texas intermediate traded below $60. This is the level that drillers said would thwart Trump’s ambitions to increase US crude oil supply.
His president’s determination to follow the ultra-protectionist tariffs has led to a fierce backlash from Wall Street, business leaders and Republican lawmakers.
The trade war also opened up a division within Trump’s own circle. Bescent explains plans to begin talks with Japan over a new trade deal, but Trump’s trade emperor Peter Navarro wrote that during the financial era the president’s position was “not negotiations.”
Tech billionaire and Trump adviser Elon Musk attacked Navarro on Tuesday, calling him “an idiot” and “a more stupid than a brick bag” after Navarro suggested that Tesla boss’s opposition to tariffs was selfish.
Additional Reports by William Sandland of Hong Kong
