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Global stock exchanges deleted more than two billion dollars on Thursday, as investors responded to new Donald Trump tariffs. The markets were caught aside by how steep they were and how wide the tariffs were.
“The markets are voting is obviously bad for American and world growth,” wrote Derek Holt, Vice-President and Chief of Capital Economics in Scotiabank.
Sales emphasizes the key question in the center of Trump’s trade policy, which he announced on Wednesday. Now they put a minimum tariff of 10 percent on almost every country, with certain states a higher so -called “reciprocal” levy, such as China, to 34 percent, the European Union at 20 percent and Vietnam at 46 percent.
On the one hand, the US president wants to increase 70 years of global trade and the basis to change the way the world operates. But it also gives the exemptions that were supposed to protect US companies, such as the auto industry and the Taiwan semiconductors.
One message built into market sale: Trump can’t have both ways.
Trump announced that they announced the “reciprocal” tariffs on dozens of countries. Who – and not – was hit? Then, Trump says that Canada has broken off the United States, imposing steep tariffs imported by US dairy products. Is he right?
“Now, I can’t have my cake and eat it,” says Karl Schamotta, a major market strategist at Financial Services Corpay.
Schamotta says the US has built a global trade system in the last 70 years and has been the main user.
“If you cancel that world order, you will pay the costs,” he says.
“The question is whether (Trump) will have a stomach to stick to it and to withstand political pressure and negative consequences that will come with (this policy).”
Car manufacturers pause production
Livestock is not the only ones that show signs of pain.
Hours after the announcement of the tariff, Stellantis, the owner of the Jeep and Ram brand, Paused production in some plants In Canada and Mexico. This was widely expected, because Trump’s separate 25 -stopped vehicle tariff would refer to any non -American parts used in vehicles made outside the USA
Stellantis car manufacturer confirmed that she had excluded her Windsor Mounting Factory for two weeks, mainly because of US tariffs on imported vehicles. Unifor Local 444 estimates that approximately 4,500 people work in various jobs and trade in the factory.
But the exclusion of production in these plants will have an effect on American production. For Stellantis, the break will affect some of its power and stamping drives that support these factories, it is said.
This will lead to the release of American workers.
The break affects approximately 3,200 people in Canada and about 900 in the US, Stellantis said in a statement to CBC News.
Canada is avenged against US President Donald Trump trade policy with 25 percent of tariffs on vehicles imported from the US that are not in accordance with the Canada-Us-Mexico Agreement. Prime Minister Mark Carney said Trump’s tariff plan means that today the global economy “is basically different than it was yesterday.”
So investors lose their shirts. American workers have been fired and the tariffs have not yet been fully imposed. Meanwhile, Canada brought a suitable 25 percent tariff On vehicles made.
BMO Higher Economist Sal Guatieri says we have no way to know how many things will get above.
“The big question is now: how aggressively other countries are revenge and whether the president will then follow threatening countermeasures, dramatic escalating trade war and increasing the risk of global and American recession?” Written by Gvaieri.
Textiles, food that is most exposed to tariffs
Tariffs are tax on US companies. Budget laboratory at Yale University Took off the numbers and found The announcement on Wednesday pushed the average effective tariff rate in the US at 22.5 percent, which is the highest of 1909.
The director of the Economics of the Budget Laboratory, Ernie Tedeschi, says new tariffs will increase prices by 1.3 percent. This means that the buying power of each household will fall on average $ 2,100 on average $ 2024, he wrote in a post on social networks. All this year’s tariffs will increase prices by 2.3 percent, he said, which will amount to an average loss of $ 3,800.
Trans NHU Tung, President Thanh Cong Textile Investment Group, says the impact of a US tariff in the US could mean more business for countries like Canada to compensate for lost US commands.
The budget lab has found that the products that have been exposed to Trump’s taxes to this day are textiles and clothing. He says that textile prices will increase by as much as 17 percent when all the tariffs are fully implemented.
The food will be disproportionately affected, increasing 2.8 percent of all levies.
This is from the president who had been elected voters in a small role that were concerned about the growing cost of living.
Trump’s trade secretary, Howard Lutnick, carried out rounds on the financial news channels because the markets sold out on Thursday. Bloomberg surveillance Host Jonathan Ferro asked the question to overshadow the entire trade policy: “How much pain are you willing to tolerate? How many pain on the market are you willing to tolerate?”
Lutnick, a successful tycoon of investment that is a longtime friend of the president, faced criticism as one of the votes in an administration that is advocating for a larger, firmer tariff, regardless of the costs.
Support or frustration against US President Donald Trump tariffs divided politicians on party lines and left consumers caught in the middle.
“What will happen is that people will realize that the great American economy is a winner here. And anyone who doubts it and anyone who adorns Donald Trump, or anyone who doubts the strength and power of the American economy, seems nonsense,” Lutnick said.
However, he continued, these tariffs will mean difficulty for all who buy a lot of everything that has been done outside the USA
“Of course, the importers will have a hard time to understand what to do because they have gone and found the cheapest production in the world. It’s time to bring that production home.”
In other words, they want US companies that use things using cheap workforce to return that production to the US, where they would have to pay more to employees. Which would increase the price of American consumers.
The question in the coming weeks and months is whether the administration will adhere to their weapons and advocate for that repatriation, regardless of the price they will pay because consumers are constantly looking at shares and prices grow.
