President Donald Trump's sweeping tariffs on imports into the United States sparked threats of retaliation yesterday, as companies and governments scrambled to assess the costs of an escalating trade war that threatens to shake up global alliances.
The punitive measures announced on Wednesday have sent shockwaves through global markets and caused condemnation from leaders of other countries who, according to Reuters, are facing the end of an era of trade liberalization that has shaped the global order for decades.
Trump said he would impose a basic tariff of 10% on all imports into the US, with additional, targeted duties on some of the biggest trading partners and the poorest countries, hitting products ranging from Italian coffee and Japanese whiskey to sportswear made in Asia.
In Europe, the German research institute IW estimated that new tariffs could wipe 750 billion euros from the region's economy.
French President Emmanuel Macron called on European companies to suspend planned investments in the United States yesterday. “I think it is important - and this is work that must be done within every sector - that future investments or investments announced in recent weeks be suspended until the situation with the United States is clarified,” Macron said during a meeting with French industry representatives. Macron stressed that no option was excluded and suggested using the European mechanism for protection against coercion, which could include measures targeting digital services and the American financial sector.
“Nothing is ruled out. Everything is at stake,” Macron said, hinting at measures against the US technology sector, “where the US benefits enormously from Europe.” He added that the response to reciprocal tariffs would be “more massive” than the reaction to US tariffs on steel and aluminium.
Macron called the tariffs "brutal and unfounded" and a shock to international trade, stressing that Europe must respond "industry by industry."
In a scathing speech in Madrid, Spanish Prime Minister Pedro Sanchez said the US administration does not distinguish between friend and foe: “It goes against everyone and everything.” Sanchez described the tariffs as an “unprecedented” and “unilateral” US attack on Europe, adding: “A return to 19th-century protectionism is not a smart way to respond to the challenges of the 21st century.”
German Economy Minister Robert Habek proposed strengthening economic ties with Canada and Mexico. “Opportunities for new alliances are emerging that we should seize decisively and decisively,” he said.
Italian Prime Minister Giorgia Meloni said the tariffs were a mistake, but that their impact should not be overestimated and that the response must be carefully measured. “We must not incite panic, it is not a catastrophe,” Meloni said in an interview with Italian state television RAI. “I am not convinced that the best way to respond to tariffs is with new tariffs,” she added.
European Commission President Ursula von der Leyen described the tariffs as a “serious blow to the global economy” that would have “terrible” consequences for millions of people. She said the EU was ready to respond, but called on Trump to “move from confrontation to negotiations.”
The EU is expected to announce countermeasures in the form of tariffs on US consumer and industrial goods in mid-April - likely including symbolic products such as orange juice, denim jeans and Harley-Davidson motorcycles - in response to Trump's previously announced tariffs on steel and aluminium.
The European bloc did not respond to the 25% tariffs on EU cars, which came into effect yesterday, nor to the latest round of reciprocal tariffs announced on Trump's so-called "liberation day", which MEPs ironically called "inflation day" and "outrage day".
The European Commission is facing growing calls to expand its repertoire of measures by targeting the American services sector - from technology companies to big banks, the British "Guardian" points out.
China has vowed retaliation over Trump's 54% tariffs on imports from the world's second-largest economy, while South Korea, Mexico, India and several other trading partners have said they will wait for now, while they try to win concessions before the new tariffs take effect on April 9.
Canadian Prime Minister Mark Carney announced a limited set of countermeasures to U.S. tariffs on Thursday, calling President Donald Trump's protectionist moves "a tragedy for global trade."
"Given the potential harm to its own population, the US administration will probably eventually change course. But I don't want to give false hope," Carney said, adding that it could be a long time before the US changes its approach.
Trump's new trade barriers are aimed at some of the US's most important geopolitical allies, Reuters points out.
In Asia, Trump imposed tariffs of 24% on Japan and 25% on South Korea, both countries that host large US military bases. He also imposed a 32% tariff on Taiwan, at a time when the island faces increased military pressure from China.
Global stock markets plunged yesterday as investors rushed to safer assets such as bonds and gold, while analysts said the announced tariffs were significantly higher than expected. US stock markets saw a sharp decline, with technology and retail companies among the hardest hit.
According to Fitch Ratings, the new US tariffs are the highest in more than 100 years. Imports into the world's largest consumer market are now subject to an average duty of 22,5%, compared to 2,5% last year.
The new tariffs could drastically change the landscape of global trade, and consumer goods like the iPhone could be among the hardest hit. Reuters points out that most iPhones are still made in China, which is hit with a 54% tariff. If the tariffs remain in place, Apple will face a difficult choice: whether to absorb the additional costs or pass them on to customers.
Administration officials say the tariffs will create new manufacturing jobs within the U.S. and expand export opportunities abroad, but they warn that it will take time to see concrete results.
“We know that many Americans are concerned,” Vice President J.D. Vance told Fox. “What I would ask the public is to understand that we can’t solve everything overnight.”
Economists warn that the tariffs could reignite inflation, increase the risk of a U.S. recession and raise costs for the average American family by several thousand dollars - a potential burden for a president who based his campaign on a promise to lower the cost of living.
Trump himself, who was scheduled to attend a golf tournament at one of his resorts in Florida yesterday, announced that he was satisfied with the measures.
"The operation is complete! The patient survived and is recovering," he wrote on social media.
Serbia fared worst in the region
Among the more than 180 countries and territories affected by Trump's decision on reciprocal tariffs is Serbia, which will be subject to tariffs of 37 percent - the highest in the region. This is followed by Bosnia and Herzegovina, which will be subject to tariffs of 35 percent, North Macedonia with 33 percent and Croatia, which, as a member of the European Union, will be subject to a tariff of 20 percent. Tariffs of 10 percent each have been imposed on Montenegro, Albania and Kosovo.
According to Beta, Serbia's main exports to the US are information and communication technology services, tires, and specialized industry products. In January, the value of US exports to Serbia was $16,9 million.
Trump's tariffs on goods imported from Serbia will primarily affect the cost of labor in the IT industry, exports of goods, the dinar exchange rate, and will increase the foreign trade deficit, but all other countries will suffer from the sudden shift in US economic policy, retired professor Božo Drašković told Beta.
Drašković said that now "the American partner of domestic IT companies in the US will not be ready to accept and compensate for these costs, so the price of labor will decrease and jobs will be lost in Serbia."
Drašković said that exports of material goods from Serbia to the US will also decrease because their prices will increase by that amount, and those goods will therefore be less competitive.
He added that the tariffs will also affect the stability of the exchange rate and wages, economic growth, and the consequences for Serbia will be even greater due to the "chaotic economic policy pursued in the country, especially over the last fifteen years."
The government of North Macedonia announced yesterday that the US decision to impose 33 percent tariffs on the country will not have a "major impact on its economy and that it has a clear plan on how to proceed." "What is important to note is that there is no need for panic, nor for hasty reactions and conclusions. This is something that this administration has been announcing for a long time, and no country has been left out - not even the oldest and most traditional partners of the US," the government in Skopje said in a statement.
This, it is emphasized, is an attempt by the US to renegotiate global trade relations - something that was necessary and which, while now a shock to some, will mean an opportunity for others.
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