Trump Threatens Tariffs, Global Trade Talks Heat Up
In a recent development, U.S. President Donald Trump has threatened to impose 50% tariffs on all imports from the European Union (EU) and 25% tariffs on iPhones not made in the U.S. This comes as trade talks with the EU seem to be stalling and amidst intensifying trade tensions with China and Japan. However, Trump has agreed to postpone the introduction of tariffs on EU goods until July 9 after a call with European Commission President Ursula von der Leyen.
Background and Context
Since taking office, Trump has been known for his aggressive trade policies, aimed at reviving the U.S. economy and protecting domestic industries. His administration has been involved in trade negotiations with various countries, including China, Japan, and the EU. However, these talks have been fraught with tension and uncertainty, causing fluctuations in global stock markets.
Key Developments
The key development in these trade talks is the threat of imposing hefty tariffs. Trump's threats to impose 50% tariffs on EU goods and 25% tariffs on iPhones have caused a significant drop in stock market values, wiping approximately $70bn off Apple’s shares and causing the European stock market to lose 183 billion.
In response to these threats, Japan's chief tariff negotiator, Ryosei Akazawa, is set to make a three-day visit to the U.S for a third round of high-level negotiations. The Japanese government is hoping to fend off U.S. tariffs by highlighting its cooperative stance towards the U.S., particularly in the field of shipbuilding.
Meanwhile, the European Parliament has backed higher tariffs on fertilizers from Russia and Belarus, affecting products like sugar, vinegar, flour, and animal feed. The EU seems ready to negotiate with China and the U.S., but it has firmly stated that it will not yield on the 10% tariffs.
Implications and Reactions
The potential imposition of these tariffs has caused alarm worldwide. Analysts believe a 50% tax on European imports would hit the continent hard, hurt the U.S. economy, and slow growth globally. Similarly, the threat of 25% tariffs on iPhones has raised pressure on Apple to build its signature product in the U.S. to escape these additional costs.
Current Status
While the threat of tariffs looms large, the situation remains fluid. The U.S. president has agreed to postpone the introduction of tariffs on EU goods until July 9 following a call with the European Commission President. It is hoped that this extension will provide room for further negotiations and a possible resolution of trade disputes.
In the meantime, countries like Japan are striving to make progress in their tariff talks with the U.S., with a possible tariff deal eyed for the June G7 leaders’ summit. The South Korean presidential front-runner has suggested extending U.S. tariff talks for a mutually beneficial agreement. As global trade talks continue to heat up, the world watches with bated breath, awaiting the outcomes of these high-stake negotiations.