Wed, 09 Apr 2025

Wed, 09 Apr 2025 Trump rips up rulebook on trade and businesses are left reeling

Firms say the rapid change in US trade policy, including big taxes on China, has left them in flux.
US President Donald Trump has launched a new round of tariffs on goods from major trading partners, including China and the European Union, in an effort to boost America's manufacturing base and national security. The tariffs, which went into effect early Wednesday morning, have sparked a trade war with China, with Beijing retaliating by increasing its own tariffs on US products. The move has sent shockwaves through global markets, with stock prices plummeting and investors selling off US government bonds. Key consumer goods in the US could see significant price hikes, including a 33% increase for clothing, according to analysts. The White House has floated the possibility of trade talks with several countries, including Japan, Vietnam, and South Korea, but it remains unclear whether these negotiations will be productive or effective. US businesses are bracing themselves for the impact of the tariffs, with many already experiencing significant disruptions. Toy company Basic Fun!, which imports most of its products from China, has put a hold on shipments to the US until the situation is resolved. Economists warn that the trade war could have far-reaching consequences, including a loss of 600,000 jobs and a $3,800 hit to purchasing power for the average household. The uncertainty surrounding the tariffs is also causing market turmoil, with investors struggling to make long-term plans. Despite calls for negotiations, President Trump has signaled resistance to exemptions and country-by-country deal-making. "The primary question... is whether or not there will be negotiations," said Thierry Wizman, a global strategist at Macquarie. "And no one has an answer to that because it's going to depend on the approach and the disposition of the negotiating parties." The US and China are already on a collision course, with tensions escalating after the White House confirmed plans to increase tax rates on Chinese products to 104%. Beijing responded by taxing US goods at an increased rate of 84%. US companies are caught in the middle, trying to navigate the complex web of tariffs and trade rules. "You would laugh if you weren't crying," said Jay Foreman, CEO of Basic Fun!.
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