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The tariffs announced Wednesday by U.S. President Donald Trump were initially met with cautious responses from major trading partners, reflecting a general reluctance to escalate tensions into a full-blown trade conflict.
Trump introduced these new import taxes, which he refers to as “reciprocal tariffs,” ranging from 10% to 49%, stating that they are intended to mirror what he claims other nations have imposed on the U.S. for years.
Global Leaders React to Tariffs
European Commission President Ursula von der Leyen criticized the move, calling it a “major blow to the world economy.” Meanwhile, a Japanese official described it as “extremely regrettable,” and South Korea’s prime minister urged emergency measures to support industries impacted by the tariffs. Following the announcement, Asian markets experienced sharp declines in Thursday’s trading session.
Thailand Open to Negotiations with the U.S.
After Trump imposed a 36% tariff on Thailand, the country’s Prime Minister, Paetongtarn Shinawatra, expressed willingness to negotiate a fair trade balance with the U.S. She emphasized Thailand’s commitment to fostering sustainable economic growth and encouraged local exporters to diversify their markets to reduce reliance on a single trade partner.
Indian Analysts See Both Challenges and Opportunities
Indian economists and exporters view the new tariffs as a mixed development for the country. While India will face a 26% reciprocal tariff, this is lower than the 34% imposed on China, 46% on Vietnam, 37% on Bangladesh, and 36% on Thailand.
Trade experts believe the tariffs will create economic pressures and impact jobs, but they also see potential opportunities for India as global supply chains shift. S.C. Ralhan, president of the Federation of Indian Exports Organisations, noted that India’s position is comparatively favorable. Ajay Srivastava, founder of the Global Trade Research Initiative, suggested that these protectionist measures could accelerate India’s integration into realigned global supply chains.
South and Southeast Asia Among the Hardest Hit
Countries in South and Southeast Asia face some of the highest tariff rates under Trump’s new policy. Vietnam will see a 46% tariff, Cambodia 49%, Bangladesh 37%, and Sri Lanka 44%. These measures are expected to impact not only local exporters but also multinational companies from China, Japan, and South Korea that have shifted manufacturing to these regions in recent years.
Stellantis to Halt Production in Canada Due to Tariffs
Automaker Stellantis announced it will temporarily close its Windsor, Canada, assembly plant for two weeks starting April 7. The local union, Unifor Local 444, attributed the shutdown to multiple factors, with Trump’s tariff announcement playing a major role. Union president James Stewart warned of further scheduling adjustments in the coming weeks, adding that uncertainty caused by the tariffs is affecting not just their plant but also facilities in the U.S. and Mexico.
European Union and Japan Seek Exemptions
Von der Leyen reiterated the EU’s readiness to negotiate with the U.S., acknowledging flaws in the global trading system while warning that the tariffs would lead to higher costs for essential goods like food, transportation, and medicine, disproportionately affecting vulnerable populations.
In Japan, Chief Cabinet Secretary Yoshimasa Hayashi called the tariffs “extremely regrettable” and argued that Japan should have been exempt. The country was hit with an additional 24% tariff, which Hayashi suggested might be inconsistent with bilateral trade agreements. Japanese officials are actively seeking an exemption but have not commented on potential retaliation or complaints to the World Trade Organization.
Market Volatility Follows Tariff Announcement
Following Trump’s announcement, stock markets in Asia suffered losses, with Japan’s Nikkei 225 plunging over 3.4%, South Korea’s Kospi down 1.8%, and Australia’s S&P/ASX 200 also dropping 1.8%.
In contrast, U.S. markets had a turbulent day but managed to close higher. The S&P 500 gained 0.7%, the Dow Jones rose 0.6%, and the Nasdaq climbed 0.9%. Tesla, which initially posted losses in the morning, rebounded later in the day, contributing to the market's positive close. Treasury yields also fluctuated, ultimately rising after a stronger-than-expected jobs report.
