WASHINGTON (news agencies) — The trade war President Donald Trump promised has begun, threatening the world economy and straining the United States’ longstanding alliances in Europe and Asia.
Goods imported from dozens of countries and territories are now going to be taxed at sharply higher rates, and that is expected to drive up the costs of everything from cars to clothes to computers.
These tariffs – which can run as high as 50% — are meant to punish countries for trade barriers that Trump says unfairly limit U.S. exports and cause it to run huge trade deficits.
Even countries with which the U.S. enjoys trade surpluses – meaning it sells to them more than it buys, such as the United Kingdom and Argentina – are being targeted with a minimum tariff of 10%. And the highest tariffs are landing on two tiny territories that trade little with America — the African kingdom of Lesotho and the French possession of Saint Pierre and Miquelon off Canada’s Atlantic coast.
For decades, global commerce abided by tariff rates agreed to by the U.S. and 122 other countries during the 1980s and 1990s. On Wednesday, Trump detonated that arrangement, saying that other countries had exploited the system and “ripped off’’ the United States for years, causing its once-mighty manufacturing base to shrink.
“Our country has been looted, pillaged, raped and plundered,” the president said in the Rose Garden.
Global financial markets recoiled on Thursday. On Wall Street, the Dow Jones industrial average dropped 1,679 points, or nearly 4%, and the U.S. dollar fell against other major currencies – a sign that investors are worried about the U.S. economy.
“This is a game changer, not only for the U.S. economy but for the global economy,” said Olu Sonola, head of U.S. economic research for Fitch Ratings. “Many countries will likely end up in a recession. You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time.”
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