Global markets plunged on Friday as US President Donald Trump issued a sweeping order imposing steep tariffs on dozens of countries triggering diplomatic unease and fears of slowed economic growth worldwide
The executive order marks the most aggressive protectionist move by the US since the 1930s raising import duties to between 10 and 41 percent for 69 trading partners and pushing the US effective tariff rate from 2 point 3 percent last year to an estimated 18 percent according to Capital Economics
Markets Dive Across Regions
The global financial fallout was immediate with the STOXX 600 dropping 1 point 8 percent on Friday and 2 point 5 percent for the week marking its worst slide since Trump’s previous tariff wave in April
In Asia MSCI’s Asia-Pacific Index outside Japan shed 1 point 5 percent while US markets also opened sharply lower
Oil prices continued their decline after falling 1 percent the previous day as investor anxiety surged
Switzerland and India Seek New Talks
Several countries struck by the new tariffs expressed dismay and sought renewed dialogue with Washington
Switzerland facing a 39 percent tariff said it was stunned by the announcement
It’s a massive shock for the export industry and for the whole country We are really stunned
Jean Philippe Kohl Deputy Director SwissmemIndia hit with a 25 percent rate has opened direct trade talks with Washington as the move could impact an estimated 40 billion dollars in exports
Key Tariff Details and Country Impacts
Among the nations affected by the new order
• Canada will now face a 35 percent tariff up from 25 percent specifically on goods linked to fentanyl-related categories
• Brazil is subject to a 50 percent rate
• Taiwan has been levied with a 20 percent duty though it labeled the rate temporary
• Australia has retained a minimum tariff of 10 percent which officials say could improve its competitiveness
Thailand saw its rate slashed from 36 percent to 19 percent prompting Finance Minister Pichai Chunhavajira to state
It helps maintain Thailand's competitiveness on the global stage boosts investor confidence and opens the door to economic growth increased income and new opportunitiesTrade Deals and Transshipment Uncertainty
Despite the European Union recently agreeing to a framework deal with Washington officials say they are awaiting further clarification particularly concerning tariffs on cars and aircraft
Confusion also remains over how the US plans to enforce transshipment restrictions which could lead to 40 percent tariffs on goods rebranded to dodge country of origin rules
Domestic Economic Impact and Rising Prices
The tariff announcement comes at a fragile moment for the US economy with new data showing slower than expected job growth and rising consumer prices
The Commerce Department reported that prices for home furnishings and durable household goods jumped 1 point 3 percent in June the largest spike since March 2022
No Real Winners Says Analysts
While some nations have escaped the harshest duties few believe the global economy will come out unscathed
No real winners in trade conflicts Despite some countries securing better terms the overall impact is negative
Thomas Rupf Co Head Singapore and CIO Asia VP BankGerman winemaker Johannes Selbach echoed that sentiment
The tariffs hurt the Americans and they hurt usBusinesses Look for Loopholes
To soften the blow some companies such as L’Oreal and various European fashion brands are exploring the decades old First Sale Rule which allows tariffs to be applied to the product’s factory value rather than its retail price potentially reducing duties
Canada India React as Mexico Gets a Reprieve
Canadian Prime Minister Mark Carney expressed deep disappointment at Trump’s decision to increase tariffs and vowed to protect Canadian jobs and diversify trade partnerships
Meanwhile Mexico was granted a 90 day reprieve from higher tariffs as negotiations continue on a broader agreement
Trump’s Justification and Strategy
In the executive order Trump argued that several nations failed to align with the US on economic and national security interests despite ongoing negotiations
The administration has also hinted at potential future trade deals but no formal details have emerged yet
Final Outlook
With markets shaken and diplomatic ties strained Trump’s tariff blitz has introduced a new chapter in global trade uncertainty While some nations are attempting to adapt or negotiate better terms the broad consensus remains that the consequences of this aggressive trade policy could drag on global growth for months to come