Donald Trump’s tariffs have provoked a wide range of responses from the countries affected, from attempts to negotiate the duties down to swift retaliatory actions, with China leading the charge by significantly raising tariffs on US imports.
Here’s a look at the key reactions from America’s major trading partners:
Chinese Retaliation
China, targeted by US tariffs of up to 104 per cent, responded strongly by increasing its tariffs on US imports to 84 per cent, up from the 34 per cent initially planned. Beijing vowed to continue its battle against the world’s largest economy “to the end.”
In addition to tariff hikes, China has imposed export restrictions on critical minerals, which are essential for manufacturing electronic consumer products and magnetic imaging devices, industries in which both the US and other nations depend.
In the wake of Trump’s actions, China has coordinated with South Korea and Japan to reinforce cooperation to maintain a “predictable trade and investment environment.”
EU’s Measured Response
The European Union, not rushing into retaliation, first allowed space for potential negotiations while also making it clear that countermeasures would follow if talks failed.
The EU, the world’s second-largest economy, will impose tariffs on US products worth 20 billion euros, including soybeans, motorcycles, and beauty products, as a response to Trump’s earlier tariffs on steel and aluminium.
For the more recent and broader wave of tariffs on around 60 countries, including a 20 per cent levy on EU goods, the European Commission is expected to unveil its response as early as next week. France and Germany have suggested that the EU might target the services sector of transatlantic trade, where the US has a surplus, potentially taxing US tech giants.
Japan’s Approach
Japan has refrained from retaliating with its tariffs, instead opting for diplomacy. Prime Minister Shigeru Ishiba held a phone call with Trump this week, agreeing to hold further talks.
Japan, as the largest foreign holder of US debt, has amassed over $1 trillion in US Treasury bonds. Despite the tariffs, these bonds are typically considered a safe financial asset, although concerns over a potential US recession and losses in equity markets have led to a sell-off.
South Korea’s Support Package
In response to the 25 per cent tariffs imposed by the US, South Korea has announced a $2 billion emergency support package for its export-driven carmakers, aiming to ease the pressure on the automotive sector.
Canada’s Retaliation
Canada, the US’s number one trading partner, has mirrored Trump’s tariffs on cars and auto parts, imposing a 25 per cent duty on specific US-made vehicles that fall outside the scope of an existing North American free trade agreement.
Canada had already been affected by earlier tariffs on imported steel and aluminium, prompting the country to impose tariffs on $21 billion worth of US goods in response.
Malaysia Hosts Xi
Malaysia is set to host a three-day visit by Chinese President Xi Jinping next week, as both nations work out how to navigate the new tariffs. As this year’s rotating chair of the ASEAN regional bloc, Malaysia will also host a special meeting of ASEAN economic ministers on Thursday to discuss collective responses to Trump’s tariffs.
