'Hold on' Trump says as 10% tariffs take effect

‘Hold on,’ Donald Trump urged Saturday as the additional 10% tariffs targeting a large portion of products imported by the U.S. took effect, acknowledging that it was ‘not going to be easy’ in the face of inflation risks.

This universal 10% floor, added to the tariffs that previously existed, represents a shock to global trade that is expected to intensify in the coming days. ‘This is an economic revolution and we will win,’ the U.S. president wrote in capital letters on his Truth Social platform Saturday, while urging his compatriots to ‘hold on’ because ‘it won’t be easy.’ ‘The final result will be historic,’ he also promised.

The 10% tariffs target a large portion of products that the U.S. imports from the rest of the world, with certain goods currently exempt: oil, gas, copper, gold, silver, platinum, palladium, construction wood, semiconductors, pharmaceuticals, or minerals not found on American soil.

Steel, aluminum and imported cars are also not affected, but they are already subject to a 25% tariff rate. Canada and Mexico, subject to a different regime, are already paying a new toll to the trade war initiated by the U.S. president.

Shortened list

The bill will be significantly higher starting April 9 for the countries that export more to the United States than they import American products. +54% in total for China (targeted in several steps), +20% for the European Union (EU), +46% for Vietnam, +24% for Japan...

This will involve about 80 countries and territories, including the 27 countries of the European bloc, according to an official document published Friday by the U.S. government. Bangladesh convened an emergency meeting Saturday to address the concerns of its country’s textile sector, the world’s second-largest clothing manufacturer which exports 20% of its ready-to-wear products to the U.S.

The list of highly taxed regions has been shortened: it no longer includes the French islands of Saint Pierre and Miquelon – which the White House presented as being targeted by a +50% tariff – nor the Australian territories of Heard and McDonald Islands, in the subantarctic region, which only host penguin colonies.

Their presence had caused a mix of astonishment and mockery regarding the American administration’s methodology. The United Nations Conference on Trade and Development (UNCTAD) expressed concern Friday about the continued presence of the world’s poorest countries on the list.

The international organization highlighted that the least developed countries and small island developing states accounted for only 1.6% and 0.4% of the U.S. trade deficit, respectively. These countries, it observed, ‘will neither help rebalance the trade deficit nor generate significant revenue.’

Trillions wiped out

Trump’s announcement on Wednesday, justified by the ‘national emergency’ of reducing the U.S. deficit, shocked the global economy. The promised tariff barriers will be as high, according to economists, as they were in the 1930s in the United States, when trade flows were eminently smaller and countries less dependent on each other’s production.

In response to the retaliations announced by Beijing (+34% on American products starting April 10) and fears of a negative spiral for the global economy, financial markets collapsed. In two days, Wall Street saw over $6 trillion in market capitalization vanish, according to the Dow Jones U.S. Total Stock Market index. Urged Friday by Trump to lower interest rates, the chairman of the Federal Reserve painted a rather bleak outlook for the U.S. economy, with tariffs: potentially more inflation, less growth and more unemployment.