new York
Cnn
–
Despite the shaken financial markets, the threats of reprisals and some of President Donald Trump’s greatest supporters encouraging him to support his signature economic policy, he did not give in.
The goods of China, by far the largest target, are now subject to at least a price of 104%. Trump nailed to even higher rates than initially expected after Beijing did not support his promise to impose 34% reprisal rates on Tuesday.
The reciprocal rates, which are not exactly reciprocal, have been calculated by dividing a country’s trade deficit with the United States by its exports to the country and by multiplying by 1/2. They vary from 11% to a huge 50%. Unless Mexico and Canada, the other best business partners in America were hardly spared in this Tour. The EU was affected by a reciprocal rate of 20%, China at 34%, Japan at 24%, Vietnam at 46%and South Korea at 25%.
These new rates occur only a few days after Trump has imposed a universal price of 10% on imports from all countries, apart from Mexico and Canada. (The rate of 10% is not additive for countries on the list of reciprocal prices. For example, the price rate of Japan increased by 14% on Wednesday since the 10% were already taken during the weekend.)
“Our country and its taxpayers have been scammed for over 50 years. But that will not happen,” said Trump last week during the prices, the more the nation saw in more than a century.
A few hours before the entry into force of the price on Tuesday, Trump made similar comments, adding that other countries, especially China, “left us for the dead, frankly”.
Now Americans and people around the world should pay a high price. Importers, not the countries targeted by Trump, will pay the prices, and these costs are often transmitted to wholesalers, retailers and ultimately consumers. But companies abroad will not be won either, the Americans likely to obtain themselves in countries with lower rate rates.
In the end, Trump’s prices threaten to degenerate a world trade war. China, already supposed to increase its reprisals against us, has promised to double. The Chinese trade ministry said on Tuesday that the country “would fight until the end” of the trade war.
Trump, on the other hand, said on Tuesday in a social article of truth that “China also wanted to conclude an agreement, bad, but they do not know how to start”.
Recession and stagflation under the spotlight
With several billions of dollars in the market value of American actions suffered in the days which followed on April 2 “Liberation Day”, forecasts for a global recession have increased.
JPMorgan increased the chances of a global recession to 60% by the end of the year, against 40% if Trump produces the full plan he presented last week.
“Tariff hikes since the start of the Trump administration now represent the largest increase in American taxes in almost 60 years,” bank economists said in a post last week. “This would have direct ramifications on household and business expenses and training effects by reprisals, a slide in the feeling of companies and disturbances of the supply chain.”
American consumers will pay $ 2,100 more per year on average due to Trump prices, according to the non -partisan tax foundation.
Since his return to the White House, Trump has been busy. Even before last week, he had previously announced a tariff of 20% on all Chinese imports and 25% prices in all imports of steel, aluminum and cars.
Meanwhile, earlier in the week, Goldman Sachs increased his forecasts for an American recession in the next 12 months to 45%, an increase of 10 percentage points compared to previous predictions. In a note entitled “countdown to a recession”, the bank economists said that they “expected the White House first announces a more aggressive rate, then to remove it somewhat”.
Unless all the prices adopted are considerably revised, Brian Bethune, professor of economics at Boston College, predicts that the American economy will enter a recession by the second quarter of this year. Even more worrying, the prices could trigger stagflation, a scenario when economic growth decreases considerably and inflation heats up.
“The probability of stagflation is 100%,” he told CNN, adding that inflation of Trump prices will reach consumer price levels by May and accelerate in June and July.
However, not everyone predicts a recession. Morgan Stanley analysts said on Tuesday that the United States would avoid recession – because they thought Trump would finally conclude agreements with countries to reduce prices. And Trump’s Chief Commercial Advisor Peter Navarro told Fox News on Monday evening that he guaranteed the American economy would not dive into a recession.
Despite dozens of countries that propose to negotiate, it is not clear that transactions can be concluded quickly – if at all. Trump and the members of his administration said that what they considered as non -tariff commercial barriers – which include the handling of currencies, the tax policies considered to be unjust and the use of the workforce on workshops – are more important than the prices. This is why they rejected the offers of various nations to fix their prices at 0% on American products in exchange for the same treatment.
Trump’s prices have struck the second world economy, China, the most difficult. Now, Beijing clashes with its greatest rival, the United States, in a full-fledged trade war.
At the end of Trump’s first term, the United States billed an average rate rate of 19.3% on Chinese products, according to a Peterson Institute for International Economic Analysis. Biden administration has maintained most Trump’s prices in place while adding others, bringing the average rate to 20.8%.
China and the United States have benefited from decades of commerce. But since Trump’s first term, the United States has turned to other countries for the goods which it had previously imported from China.
Mexico was one of the main beneficiaries, having surpassed China to become the main source of American imports in 2023, a position it maintained last year. Several Asian countries, including Vietnam, South Korea and Taiwan, have also seen trade flows towards American overvoltage since Trump’s first term.
This does not mean that the 104% price on Chinese products will not matter – it will do a lot – and they could easily go even higher. Even with preexisting prices in place, China was still the second largest source of foreign goods last year, according to data from the US trade department.
China sent a total of $ 439 billion in the United States in 2024, while the United States exported $ 144 billion in China. The country has also remained the main foreign source of several articles.
Mutual prices threaten to harm the national industries and are about to result in layoffs.
If Trump was to cancel his prices, which he has sworn several times, a large part of the economic damage could be canceled “but certainly not all,” CNN, associate director Colin Grabow, at CNN.
“Trump’s actions have greatly harmed American credibility, not only by the fragile justifications for the price, but also the violation of the long-standing free trade agreements with American trade partners,” he said. “Companies need a certain degree of certainty to operate, and Trump’s chaotic approach does not provide it.”
