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Trump raises tariffs to 104% on China, fuels fears of global economic recession

Published

5 months ago

April 9, 2025

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NEW YORK, April 9: Despite significant turmoil in financial markets, threats of retaliation, and pressure from some of President Donald Trump’s key supporters to scale back his signature economic policy, Trump pressed forward with his aggressive stance on trade. On Wednesday, his administration imposed new “reciprocal” tariffs on a range of American allies and adversaries, aiming to, in his words, restore fairness and revitalize American manufacturing.

China, the primary target, now faces tariffs of at least 104%, surpassing the initially planned figures. Trump raised these tariffs further after Beijing maintained its promise to impose 34% retaliatory tariffs on U.S. goods. The new tariff rates, which were based on a formula involving a country’s trade deficit with the U.S., range from 11% to 50%. In this round, key U.S. trading partners such as the European Union (20%), China (34%), Japan (24%), Vietnam (46%), and South Korea (25%) were all affected, with Mexico and Canada being the only major exceptions.

These tariff hikes come just days after Trump levied a 10% universal tariff on all imports except from Mexico and Canada. The 10% tariff is not added to the new reciprocal tariffs; for instance, Japan’s tariff rate increased by 14% on Wednesday after the initial 10% was already applied.

In a recent statement, Trump declared, “Our country and its taxpayers have been ripped off for more than 50 years. But it is not going to happen anymore.” He reiterated similar remarks just hours before the tariffs went into effect, accusing other countries, particularly China, of “leaving us for dead.”

As these tariffs take effect, both Americans and people worldwide will feel the financial impact. Importers will initially bear the brunt of the tariffs, but those costs are typically passed on to wholesalers, retailers, and ultimately consumers. Foreign businesses are also likely to feel the effects, with American companies potentially seeking goods from countries with lower tariff rates.

The ongoing trade war threatens to escalate, with China’s Foreign Ministry promising to take “resolute and effective measures” to protect its interests, though no immediate retaliatory actions were announced. The market’s reaction has been swift, with several trillion dollars in U.S. stock market value evaporating since April 2, leading to heightened concerns about a global recession. JPMorgan has increased its forecast for a global recession to 60% by year-end if Trump continues with his full tariff plan.

Economists at JPMorgan highlighted that the tariff hikes under Trump’s administration represent the largest U.S. tax increase in nearly six decades. These measures could have significant consequences for household and business spending, leading to retaliation, declining business sentiment, and disruptions to global supply chains. The nonpartisan Tax Foundation estimates that American consumers will face an additional $2,100 in annual costs due to these tariffs.

Since returning to the White House, Trump has continued to make bold moves. Prior to this latest round, he had already imposed a 20% tariff on all Chinese imports and 25% tariffs on steel, aluminum, and automotive imports.

Goldman Sachs has raised its forecast for a U.S. recession to 45% within the next year, up from previous estimates. In a note titled “Countdown to a Recession,” the bank’s economists expressed surprise that Trump did not initially announce even higher tariffs and then scale them back.

Economists such as Brian Bethune, an economics professor at Boston College, predict that unless significant revisions are made to the tariffs, the U.S. economy will enter a recession by the second quarter of the year. There are even concerns that the tariffs could spark stagflation, a scenario where economic growth slows while inflation rises.

Despite these ominous predictions, not all analysts believe a recession is inevitable. Morgan Stanley analysts have suggested that the U.S. could avoid a downturn if Trump strikes deals with other nations to lower tariffs. Trump’s chief trade adviser, Peter Navarro, echoed this sentiment, confidently telling Fox News that he guaranteed the U.S. economy would not enter a recession.

However, even as dozens of countries have expressed a willingness to negotiate, it remains unclear whether these discussions will yield any results. Trump’s administration has made it clear that non-tariff trade barriers—such as currency manipulation, unfair tax policies, and labor conditions—are at the heart of their trade disputes, and they’ve rejected offers to reduce tariffs on U.S. goods in exchange for similar treatment.

China, the world’s second-largest economy, has been the hardest hit by Trump’s tariffs, and the U.S. and China are now fully engaged in a trade war. When Trump’s first term ended, the U.S. charged an average tariff rate of 19.3% on Chinese goods, according to the Peterson Institute for International Economics. Under President Biden, these tariffs have remained largely intact, with the average tariff rate on Chinese goods increasing slightly to 20.8%.

While both the U.S. and China have benefited from decades of trade, the U.S. has increasingly sought goods from other countries, such as Mexico, which overtook China as the largest source of U.S. imports in 2023. Several other Asian countries, including Vietnam, South Korea, and Taiwan, have also seen their trade with the U.S. surge since the start of Trump’s presidency.

Even with existing tariffs, China remained a significant supplier of goods to the U.S. in 2024, with $439 billion worth of Chinese goods entering the U.S., while the U.S. exported $144 billion in goods to China. The mutual tariffs imposed by both countries threaten to hurt domestic industries and could lead to layoffs in both nations.

If Trump were to reverse his tariff decisions, much of the economic damage could be mitigated, though some effects would likely remain. Colin Grabow, an associate director at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, noted that Trump’s approach has damaged U.S. credibility, undermining long-standing free trade agreements and making it difficult for businesses to plan with certainty.

Related Topics:China economic fears fuels global raises recession tariffs Trump

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Ethiopia inaugurates Africa’s largest hydroelectric dam as neighbors eye power imports

Published

4 hours ago

September 10, 2025

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A view of the Grand Ethiopian Renaissance Dam in Benishangul-Gumuz, Ethiopia on Sept 9. (AP)

ADDIS ABABA, Ethiopia, Sept 10, (AP): Ethiopia on Tuesday inaugurated Africa’s largest dam to boost the economy, end frequent blackouts and support the growth of electric vehicle development in a country that has banned the importation of gasoline-powered vehicles. As reservoir waters flowed into the turbines of the Grand Renaissance Dam, Ethiopians dressed in colorful regalia viewed the ceremony on large screens across the capital, Addis Ababa, and celebrated the achievement with dancing to traditional music.

“We will have enough power to charge our electric vehicles from the new dam,” said Belay Tigabu, a bus driver in Addis Ababa’s main bus terminal. The almost $5 billion mega-dam, located on the Blue Nile tributary of the Nile River near Ethiopia’s border with Sudan, will produce more than 5,000 megawatts and is expected to double national electricity generation capacity, according to officials. Ethiopia’s Prime Minister Abiy Ahmed, speaking during the launch, said the dam was a “big achievement” that would show the world what Africans are capable of accomplishing.

Dozens of visiting African heads of state and government joined Abiy for the inauguration, with many expressing interest in importing power from Ethiopia. “I am proud to announce we will soon be signing an agreement with the government of Ethiopia to receive electricity from the dam that will benefit our hospitals and schools,” said South Sudan’s President Salva Kiir. Kenyan President William Ruto said his nation is looking to sign a power purchasing agreement with Ethiopia based on the resources of the dam project, which he said was a “pan-African statement.”

Already an importer of Ethiopia electricity, Ruto said Kenya is seeking to alleviate the electricity deficit his country is experiencing. He said the dam “exemplifies the scale and ambition of African-led infrastructure and aligns with the Africa Union’s vision of continental energy connectivity.” But Ethiopia’s new dam has faced controversy, with neighboring Egypt expressing concerns over reduced water flows downstream.

Egypt has long opposed the dam because of concerns it would deplete its share of Nile waters. The Arab world’s most populous country relies almost entirely on the Nile to supply water for agriculture and its more than 100 million people. Tamim Khallaf, a spokesperson for Egypt’s Ministry of Foreign Affairs, told The Associated Press that the dam posed an “existential threat.”

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Asian shares mostly rise, cheered by Wall Street rally to more records

Published

6 hours ago

September 10, 2025

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A dealer stands near the screens showing the Korea Composite Stock Price Index (KOSPI), (left), and the foreign exchange rate between US dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea on Sept 10. (AP)

TOKYO, Sept 10, (AP): Asian shares mostly rose in early Wednesday trading, echoing record rallies on Wall Street after the latest update on the job market bolstered hopes the US Federal Reserve will cut interest rates. Japan’s benchmark Nikkei 225 gained 0.9% to finish at 43,837.67. Australia’s S&P/ASX 200 added 0.3% to 8,830.40.

South Korea’s Kospi jumped 1.7% to 3,314.66. Hong Kong’s Hang Seng rose 1.1% to 26,223.30, while the Shanghai Composite edged up 0.2% to 3,814.63. Uncertainty is still in the air over US-China tariff issues as bilateral talks continue. US President Donald Trump has raised taxes on imports from China, triggering a tit-for-tat tariff war.

The U.S. is currently charging an additional 30% tariff on Chinese goods and China is charging a 10% tariff under a de-escalation deal reached in May. On Wall Street, the S&P 500 rose 0.3% and squeaked past its all-time high set last week. The Dow Jones Industrial Average climbed 196 points, or 0.4%, while the Nasdaq composite gained 0.4%.

They likewise set records. Traders have become convinced that the Federal Reserve will cut its main interest rate for the first time this year at its next meeting in a week, in order to prop up the slowing job market. A report on Tuesday offered the latest signal of weakness, when the US government said its prior count of jobs across the country through March may have been too high by 911,000, or 0.6%.

That was before President Donald Trump shocked the economy and financial markets in April by rolling out tariffs on countries worldwide. The bet on Wall Street is that such data will convince Fed officials that the job market is the bigger problem now for the economy than the threat of inflation worsening because of Trump’s tariffs.

That would push them to cut interest rates, a move that would give the economy a boost but could also send inflation higher. A lot is riding on Wall Street’s hope that the job market is slowing by just the right amount: Investors have already sent US stock prices to records because of it. Inflation also needs to stay at a reasonable level, even though it looks tough to get below the Fed’s target of 2%. In the bond market, the yield on the 10-year Treasury rose to 4.08% from 4.05% late Monday.

Business

Real estate transactions dip sharply in Kuwait

Published

21 hours ago

September 9, 2025

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KUWAIT CITY, Sept 9: The real estate market witnessed a significant decline in the number and value of transactions in the first week of September, compared to the same period last year, as well as the last week of August. This is a clear indication that the market has entered a period of relative calm and investment anticipation driven by seasonal factors and qualitative shifts in transactions, particularly commercial real estate, which accounted for about 60 percent of the total trading value during the week, compared to only three transactions. It reflects the interest of major institutions or entities in ‘heavy’ commercial transactions. The weekly report of the Real Estate Registration and Documentation Department at the Ministry of Justice for the period from Sept 1 to 3 showed that the number of real estate transactions was 62, with a total value of KD83.92 million.

These include 37 private transactions worth KD 13.5 million, 22 investment transactions worth KD 17.6 million, and three commercial transactions worth KD 52.8 million. Compared to the first week of September 2024, weekly trading recorded a decline of approximately 39 percent in the number of transactions, compared to a 16.8 percent increase in total value due to the completion of qualitative commercial deals. The number of transactions during that period reached 101, valued at KD 69.8 million, reflecting a quantitative decline versus a qualitative increase in transactions on an annual basis. Compared to trading during the fourth (and final) week of August 2025, the decline was more severe, with 139 transactions recorded, valued at KD 163.24 million.

This is a decline of approximately 55 percent in the number of transactions (77 transactions) and a 49 percent decrease in the value or KD 79.32 million. It is a clear indication that the market has entered a short-term slowdown after a remarkable wave of activity in August. Regarding private real estate transactions, they declined from 89 in the last week of August to just 37, a decrease of nearly 58 percent. The value also fell from KD 33.4 million to KD 13.5 million — by KD19.9 million, a decrease of nearly 60 percent. This indicates a decline in residential ownership activity due to travel or investors’ anticipation of market movements following the recent enactment of several real estate laws. Despite the decline in the number of investment transactions from 28 in August 2025 to 22 in September, the value of transactions increased to KD 17.6 million, compared to KD 15.3 million in August. It means continued demand for investment properties and the search for attractive, quality opportunities. As for commercial transactions, only three transactions were recorded this week, worth KD52.8 million or 60 percent of the total weekly trading value. It shows the execution of quality deals and investors’ focus on quality transactions and assets with long-term returns.

By Marwa Al-Bahrawi
Al-Seyassah/Arab Times Staff