MEXICO CITY – U.S. President Donald Trump's sweeping new tariffs on American imports shocked governments and investors around the world, swiftly spurring both threats of retaliation and calls for negotiation as industries scrambled and global stocks tumbled.
China accused the U.S. of “bullying” and the European Union said it was ready to mount “robust” countermeasures, with French officials suggesting taxes to hit U.S. tech giants.
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Yet others, like the United Kingdom and Japan, expressed hope for a deal with Trump and refrained from talk of retaliation against the world's biggest economy, fearing that slapping their own tariffs on American goods will only make things worse.
Trump said Wednesday that the import taxes, ranging from 10% to 49%, would do to U.S. trading partners what they have long done to the U.S. He maintains the tariffs will draw factories and jobs back home.
“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.”
Trump imposed a 34% levy on goods from China on top of an earlier 20% tariff, as well as a 20% tariff on the EU, 24% on Japan and 25% on South Korea.
China, a key exporter to the U.S. of everything from clothing to kitchenware, has already announced a raft of retaliatory measures expected to raise prices for U.S. consumers.
“There are no winners in trade wars and tariff wars,” China's Foreign Ministry spokesperson Guo Jiakun said. “It is clear to everyone that more and more countries are opposing the U.S.’s unilateral bullying actions.”
French President Emmanuel Macron met with representatives of key sectors affected by the tariffs, after urging businesses to suspend all investments in the U.S. “What would be the message of having major European players investing billions of euros in the American economy at a time when they’re hitting us?” Macron said.
European Commission President Ursula von der Leyen denounced Trump's levies as a “major blow to the world economy” but held off announcing new countermeasures. She said the commission — which handles trade issues for the 27 EU member countries — was “always ready” to talk.
Analysts say there’s little to be gained from an all-out trade war, since higher tariffs can restrain growth and raise inflation.
“Europe will have to respond, but the paradox is that the EU would be better off doing nothing,” said Matteo Villa, a senior analyst at Italy’s Institute for International Political Studies.
“Trump seems to understand only the language of force, and this indicates the need for a strong and immediate response,” Villa said. “The hope, in Brussels, is that the response will be strong enough to induce Trump to negotiate and, soon, to backtrack.”
Italian Prime Minister Giorgia Meloni told Italian state TV on Thursday that she hoped for exactly that.
“We need to open an honest discussion on the matter with the Americans, with the goal — at least from my point of view— of removing tariffs, not multiplying them,’’ Meloni said.
Next target could be U.S. tech companies
Europe's strategy so far has been to limit retaliation to a few politically sensitive goods, like whiskey and Harley-Davidson motorcycles, in an attempt to push the U.S. to negotiate.
Economists say that Europe could broaden the trade war to the vast services sector by targeting Big Tech — a category more vulnerable to countermeasures because the U.S. exports more than it imports.
The EU response could include a tax on U.S. digital giants such as Google, Apple, Meta, Amazon and Microsoft, as French officials have recommended.
Outgoing German Chancellor Olaf Scholz said the EU "must show that we have strong muscles.” But he signaled no desire to ignite an all-out trade war that could hobble the bloc's export-dependent economy.
“This with the aim of an agreement,” he said. "That is the best for prosperity in the U.S., for prosperity in Europe and for prosperity in the world.”
British Prime Minister Kier Starmer said his government would react with “cool and calm heads," telling business leaders in London that he hopes to strike a trade deal with the U.S. that would see the tariffs rescinded.
“Nobody wins in a trade war, that is not in our national interest,” Starmer said.
Japan, a huge investor in the U.S. and Washington's closest ally in Asia, plans to assess the impact of the tariffs, Chief Cabinet Secretary Yoshimasa Hayashi said, displaying a more conciliatory approach.
‘Blow to the world economy’
The round of tariffs jolted financial markets, with the U.S. Standard & Poors 500 off 3.7% in afternoon trading.
The STOXX Europe 600 index fell 2.7% and a 2.8% drop in Tokyo’s benchmark led losses in Asia. Oil prices sank more than $2 a barrel. Analysts fished for superlatives to describe the scope of disruption to the global trading order as Trump's announcement overturned decades of efforts to lower tariffs through free trade agreements and negotiations.
“The magnitude of the rollout — both in scale and speed — wasn’t just aggressive; it was a full-throttle macro disruption,” Stephen Innes of SPI Asset Management said.
Deutsche Bank's Jim Reid called it “radical policy reordering” and said the U.S. now had an average tariff of 25%-30%, the “worst end of expectations” and the highest since the early 20th Century.
The head of the World Trade Organization raised alarm over what she described as “substantial implications,” warning that the U.S. protectionist measures will likely cause global trade volumes to drop by about 1% this year.
“I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade,” said WTO Director-General Ngozi Iweala-Okonjo.
Other financial analysts, like Olu Sonola, Fitch Ratings’ head of U.S. Economic Research, called it a game-changer. “Many countries will likely end up in a recession,” he wrote in a report.
On a Pacific island, incomprehension
A eye-popping 29% tariff imposed on Norfolk Island came as a shock to the remote South Pacific outpost's 2,000 inhabitants, particularly as its governing nation, Australia, was hit with a far lower tariff of 10%.
“To my knowledge, we do not export anything to the United States,” Norfolk Island Administrator George Plant, the Australian government’s representative on the island, said Thursday. “We’re scratching our heads here.”
A collection of small and sparsely populated territories — including Jan Mayen, a Norwegian island thought to have more polar bears than people, as well as the barren, volcanic Heard and McDonald Islands in the remote Antarctic — also found themselves targeted with 10% tariffs.
Vladimir Putin’s Russia, meanwhile, was left off Trump’s list.
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AP journalists around the world contributed to this story.