New Trade Barriers Spark Global Economic Concerns
BEIJING / BRUSSELS / WASHINGTON — The ongoing trade dispute intensified on Wednesday as China and the European Union announced new tariffs in retaliation to the broad U.S. duties imposed by President Donald Trump. The move adds to concerns of a global economic slowdown, as key markets face rising costs and uncertainty.
China increased its tariffs on U.S. imports from 34% to 84%, responding swiftly after the U.S. began enforcing 104% tariffs on Chinese goods. The European Union followed with 25% tariffs on a range of U.S. products, while Canada and other nations also enacted countermeasures.
Markets Rattle as Trade Conflict Widens
The surge in tariffs affects dozens of countries, disrupting long-established trade relationships. Average U.S. tariff levels now exceed 20%, compared to just 2.5% before Trump’s presidency, according to various estimates.
Financial markets responded sharply:
- Oil prices dropped to four-year lows
- Global stock markets saw extended losses
- Treasury bonds and the dollar—typically safe-haven assets—were sold off
- Corporate borrowing costs increased amid volatility
JPMorgan CEO Warns of Recession Risks
Jamie Dimon, CEO of JPMorgan Chase, warned that the tariffs could trigger a recession and increase the risk of loan defaults. He urged rapid and structured trade negotiations to avoid further financial damage.
Despite market pressure, Trump appeared unfazed. “BE COOL! Everything is going to work out well,” he posted on social media, emphasizing his view that the tariffs are part of a long-term strategy to rebuild U.S. manufacturing.
U.S. Plans for More Tariffs, Limited Talks with China
While the administration has stated that it is open to country-specific negotiations, it confirmed that China is not a current priority for talks. Trump reiterated plans to expand tariffs to pharmaceutical imports, which caused a drop in global pharmaceutical stocks.
Beijing responded by placing restrictions on 18 additional U.S. companies, mostly in the defense sector, and hinted that more retaliation could follow. Chinese financial authorities also took steps to stabilize the yuan amid currency pressure.
Impact on Consumers and Businesses
As tariffs take effect, some U.S. retailers are preparing to raise prices. Analysts estimate that average American households could see annual cost increases in the thousands. A recent Reuters/Ipsos poll found that 75% of Americans expect higher prices as a result of the trade war.
Still, companies like Walmart said they would work to maintain prices and meet their sales targets, even as supply chain costs rise.
Democratic Leaders Voice Mixed Reactions
Democrats have offered varied responses. Some criticize the strategy as harmful and poorly executed, while others say the use of tariffs isn’t inherently wrong—just too aggressive in its current form.
“Tariffs need to be used like a scalpel, not a hammer,” said Michigan Governor Gretchen Whitmer, speaking at a recent event in Washington.
