ZURICH/WASHINGTON: US President Donald Trump’s latest wave of tariffs on exports from dozens of trading partners sent global stock markets tumbling on Friday and countries and companies scrambling to seek ways to strike better deals.
As Trump presses ahead with plans to reorder the global economy with the highest tariff rates since the early 1930s, Switzerland, “stunned” by 39 percent tariffs, sought more talks, as did India, hit with a 25 percent rate.
New tariffs also include a 35 percent duty on many goods from Canada, 50 percent for Brazil, 20 percent for Taiwan, which said its rate was “temporary” and it expected to reach a lower figure.
The presidential order listed higher import duty rates of 10 percent to 41 percent starting in a week’s time for 69 trading partners, taking the US effective tariff rate to about 18 percent, from 2.3 percent last year, according to analysts at Capital Economics.
US stocks reeled. The Dow Jones Industrial Average closed down 1.23 percent at 43,588.58, the S&P 500 1.6 percent to 6,238.01 and the Nasdaq Composite 2.24 percent at 20,650.13.
Global shares stumbled, with Europe’s STOXX 600 tumbling 1.89 percent on the day.
Markets also reacted to a disappointing jobs report. Data showed US job growth slowed more than expected in July while the prior month’s data was revised sharply lower, pointing to a slowdown in the labor market.
Trump responded by ordering the firing of the commissioner of the Labor Department’s Bureau of Labor Statistics, Erika McEntarfer, and claiming, without evidence, that the job figures were “rigged.”
Meanwhile, Canadian negotiators said a deal with the US could still be weeks away.
Trump’s new tariffs have created yet more uncertainty, with many details unclear. They are set to take effect on Aug 7 at 0401 GMT, a White House official said.
Trump administration officials defended the president’s approach. “The uncertainty with respect to tariffs ... was critical to getting the leverage that we needed to create the circumstance in which the president could create the trade deals we’ve seen over the last few weeks, which have been nothing short of monumental,” Council of Economic Advisers Chair Stephen Miran said on CNBC.
The European Union, which struck a framework deal with Trump on Sunday, is still awaiting more Trump orders to deliver on agreed carve-outs, including on cars and aircraft, EU officials said, saying the latest executive orders did not cover that.
Also, it is unclear how the administration intends to define and police the transshipment restrictions, which threaten 40 percent levies on any exporter deemed to have tried to mask goods from a higher-tariffed originator, such as China, as their own product.
Trump’s tariff rollout also comes amid evidence they have begun driving up prices.
US Commerce Department data released Thursday showed prices for home furnishings and durable household equipment jumped 1.3 percent in June, the biggest gain since March 2022.
NO WINNERS?
Some countries hit with hefty tariffs said they will seek to negotiate with the US in hopes of getting a lower rate.
Switzerland said it would push for a “negotiated solution” with the US
“It’s a massive shock for the export industry and for the whole country. We are really stunned,” said Jean-Philippe Kohl, deputy director of Swissmem, representing Switzerland’s mechanical and electrical engineering industries.
South Africa’s Trade Minister Parks Tau said he was seeking “real, practical interventions” to defend jobs and the economy against the 30 percent US tariff it faces.
Southeast Asian countries, however, breathed a sigh of relief after the US tariffs on their exports that were lower than threatened and leveled the playing field with a rate of about 19 percent across the region’s biggest economies.
Thailand’s finance minister said a reduction from 36 percent to 19 percent would help his country’s economy.
“It helps maintain Thailand’s competitiveness on the global stage, boosts investor confidence and opens the door to economic growth, increased income and new opportunities,” Pichai Chunhavajira said.
Australian products could become more competitive in the US market, helping businesses boost exports, Trade Minister Don Farrell said, after Trump kept the minimum tariff rate of 10 percent for Australia.
But businesses and analysts said the impact of Trump’s new trade regime would not be positive for economic growth.
“No real winners in trade conflicts,” said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank. “Despite some countries securing better terms, the overall impact is negative.”
“The tariffs hurt the Americans and they hurt us,” winemaker Johannes Selbach said in Germany’s Moselle Valley, adding jobs and profits on both sides of the Atlantic would be hit.
L’Oreal and a growing number of European fashion and cosmetics companies are exploring use of an obscure, decades-old US customs clause known as the “First Sale” rule as a potential way to soften the impact of the tariffs.
The “First Sale” rule allows companies to pay lower duties by applying tariffs to the value of a product as it leaves the factory — much lower than the eventual retail price.
CANADA, INDIA
Trump has tapped emergency powers, pressured foreign leaders, and pressed ahead with trade policies that sparked a market sell-off when they were first announced in April.
His order said some trading partners, “despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters.”
Trump issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35 percent, from 25 percent previously, saying Canada had “failed to cooperate” in curbing illicit narcotics flows into the US
The higher tariffs on Canadian goods contrasted sharply with Trump’s decision to grant Mexico a 90-day reprieve from higher tariffs of 30 percent on many goods to allow time to negotiate a broader trade pact.
Canadian Prime Minister Mark Carney said he was disappointed by Trump’s decision, and vowed to take action to protect Canadian jobs and diversify exports.
India is in trade talks with the US after Washington imposed a 25 percent tariff on New Delhi, a move that could impact about $40 billion worth of its exports, an Indian government source with knowledge of the talks told Reuters on Friday.
