Beijing/Washington/Brussels (Reuters) – United States President Donald Trump’s decision to suspend most of the heavy tariffs that had just imposed dozens of countries brought relief to global markets and European leaders, even with the aggravation of trade war with China.
Trump’s turnaround, less than 24 hours after new tariffs were imposed on most business partners, occurred after the most intense episode of financial market volatility since the early days of Covid-19 pandemic.
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US equity rates fired on the news, and the relief remained in the Asian and European trading sessions on Thursday.
Prior to Trump’s turnaround, nervousness had erased trillions of stock markets and led to a disturbing increase in the income of US government titles, which seemed to draw the attention of the US president.
Although some European leaders celebrated Trump’s latest movement and said they expected constructive negotiations, China rejected what he called Washington’s threats and blackmail.
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Trump maintained the pressure on China, the world’s second largest economy, and the second largest US import supplier, with an increase in Chinese imports to 125% over the 104% level that came into force on Wednesday.
He also signed a decree aimed at reducing China’s control over the global maritime transport sector and revitalizing US naval construction.
Trade war
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China will “go to the end” if the US insisted on its own path, Ministry of Commerce spokesman He Yongqian told a regular press conference. China’s door is open to dialogue, but it should be based on mutual respect, the ministry said.
Beijing can respond again after imposing 84% rates on US imports on Wednesday.
“We have not retreated,” posted Mao Ning, spokesman for the Foreign Ministry at X on Thursday, sharing a video of a speech by the late Chinese leader Mao Zedong, 1953, during the War with the United States on the Korean Peninsula. The Korean War ended in a stalemate at the end of that year.
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Trump, who claims that tariffs aim to correct US commercial imbalances, said a resolution with China about commerce is also possible. But authorities said they will prioritize negotiations with other countries, as Vietnam, Japan, South Korea and others align to try to reach an agreement.
Goldman Sachs has revised down their GDP growth forecasts from 4.5% to 4% in 2025, citing the negative effects of tariffs. Iuan has reached its lowest dollar value on Thursday since the global financial crisis.
In Europe, the eurge of eurozone income jumped, the spreads narrowed, and the markets reduced their interest -cut bets by the European Central Bank after Trump’s last announcement. European actions climbed.
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Trump’s measure was an important step in stabilizing the global economy, the European Commission chairman, Ursula von der Leyen, said.
“Clear and predictable conditions are essential for trade and offering chains to work,” she said in an X statement.
India is among the countries that said they wanted to advance quickly in a trade agreement with the United States.
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After emphasizing that his plans would not change, Trump later indicated that almost panic in the markets that unfolded since his April 2 ads had influenced his thinking.
“You have to be flexible,” he told reporters.
Some tariffs remain
Trump’s reversal over tariffs imposed on other countries is not absolute either. A 10% general rate on almost all US imports will remain in force, the White House said. The announcement also does not seem to affect the car rates, steel and aluminum that are already in force.
The pause also does not apply to channels paid by Canada and Mexico, because their products are still subject to 25% Fentanile rates if they are not in accordance with the rules of origin of the US, Mexico and Canada trade agreement.