Apr 03, 2025
It’s official: President Donald Trump has announced sweeping tariffs on friends and foes alike, with the minimum rate at 10% and higher versions of between 20% and as much as 49%. Oil prices took a dive after the announcement, predictions of a grim economic future multiplied, and countries around the world vowed to retaliate. It’s a game of tariffs with a twist: energy imports were exempted from the tariffs.
On Wednesday afternoon, President Trump announced a 10% additional levy on most goods that enter the United States. For some trade partners, however, the levies were much higher. China got an additional import tariff of 34%, as threatened by Trump earlier, to be added to a 20% import tariff he slapped on Chinese-made products earlier in the year. India got hit with a 26% import tariff, ally and all. And the European Union is threatening retaliation for the 20% tariff rate Trump picked for it.
“China firmly opposes this and will take countermeasures to safeguard its own rights and interests,” the Chinese ministry of commerce said after the announcement of the new tariffs. This is hardly a surprise, since China reacted in the same way when Trump announced his first tariffs against it and was quick enough to react by announcing its own retaliatory tariffs, notably on U.S. energy imports. Others may do the same—boosting other energy suppliers.
Many freshly tariffed governments are threatening to retaliate, and it is this threat, along with the tariffs themselves, that appears to have shaken stock and commodity markets this week while the dust settles. The European Union has called the tariffs “illegal”, with European Commission president Ursula von der Leyen saying earlier today that “We are already finalising a first package of countermeasures in response to tariffs on steel. And we are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail.”
Trump has argued that the new tariffs aim to level the playing field for U.S.-made products sold abroad, where they have to compete with tariff-protected local products—with these local tariffs sometimes much higher than the maximum Trump rate. The U.S. tariffs have been dubbed reciprocal, therefore, with proponents saying Trump is doing to other exporters the same that other importers have been doing to U.S. products.
There don’t seem to be many proponents of the new tariffs out there, however. India, which is notorious for its substantial import tariffs, got a Trump rate of 26% on many of its exports, even after it signaled it was prepared to reduce its own tariff rates on U.S. imports worth $23 billion to avoid the new levies. It even followed these words with actions, actually cutting import duties on some U.S. products. It didn’t help. Neither did it help Israel when it removed all import tariffs on U.S. goods. Israel got slapped with a 17% tariff.
The most pessimistic warnings from analysts and other observers are about inflation and the lower consumer spending resulting from it—and the drop in oil demand that goes hand in hand with those. It is still early hours, if not days, so the most immediate effect has been on stocks, bonds, and commodities, where this pessimism has been reflected clearly. What happens next is anyone’s guess, but retaliation may well be a part of it. “Governments will look weak if they don’t hit back”, the chief strategist of Pictet Asset Management, Luca Paolini, told the Financial Times, only to add that these governments will probably be open to negotiations, too. Retaliation, after all, is easy enough. Damage control after is the more difficult part.
oilprice.com
It’s official: President Donald Trump has announced sweeping tariffs on friends and foes alike, with the minimum rate at 10% and higher versions of between 20% and as much as 49%. Oil prices took a dive after the announcement, predictions of a grim economic future multiplied, and countries around the world vowed to retaliate. It’s a game of tariffs with a twist: energy imports were exempted from the tariffs.
On Wednesday afternoon, President Trump announced a 10% additional levy on most goods that enter the United States. For some trade partners, however, the levies were much higher. China got an additional import tariff of 34%, as threatened by Trump earlier, to be added to a 20% import tariff he slapped on Chinese-made products earlier in the year. India got hit with a 26% import tariff, ally and all. And the European Union is threatening retaliation for the 20% tariff rate Trump picked for it.
“China firmly opposes this and will take countermeasures to safeguard its own rights and interests,” the Chinese ministry of commerce said after the announcement of the new tariffs. This is hardly a surprise, since China reacted in the same way when Trump announced his first tariffs against it and was quick enough to react by announcing its own retaliatory tariffs, notably on U.S. energy imports. Others may do the same—boosting other energy suppliers.
Many freshly tariffed governments are threatening to retaliate, and it is this threat, along with the tariffs themselves, that appears to have shaken stock and commodity markets this week while the dust settles. The European Union has called the tariffs “illegal”, with European Commission president Ursula von der Leyen saying earlier today that “We are already finalising a first package of countermeasures in response to tariffs on steel. And we are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail.”
Trump has argued that the new tariffs aim to level the playing field for U.S.-made products sold abroad, where they have to compete with tariff-protected local products—with these local tariffs sometimes much higher than the maximum Trump rate. The U.S. tariffs have been dubbed reciprocal, therefore, with proponents saying Trump is doing to other exporters the same that other importers have been doing to U.S. products.
There don’t seem to be many proponents of the new tariffs out there, however. India, which is notorious for its substantial import tariffs, got a Trump rate of 26% on many of its exports, even after it signaled it was prepared to reduce its own tariff rates on U.S. imports worth $23 billion to avoid the new levies. It even followed these words with actions, actually cutting import duties on some U.S. products. It didn’t help. Neither did it help Israel when it removed all import tariffs on U.S. goods. Israel got slapped with a 17% tariff.
The most pessimistic warnings from analysts and other observers are about inflation and the lower consumer spending resulting from it—and the drop in oil demand that goes hand in hand with those. It is still early hours, if not days, so the most immediate effect has been on stocks, bonds, and commodities, where this pessimism has been reflected clearly. What happens next is anyone’s guess, but retaliation may well be a part of it. “Governments will look weak if they don’t hit back”, the chief strategist of Pictet Asset Management, Luca Paolini, told the Financial Times, only to add that these governments will probably be open to negotiations, too. Retaliation, after all, is easy enough. Damage control after is the more difficult part.
Trump’s Tariffs: Trade War Goes Global | OilPrice.com
Many freshly tariffed governments are threatening to retaliate, and it is this threat, along with the tariffs themselves, that appears to have shaken stock and commodity markets this week while the dust settles
oilprice.com
