Trump's global tariff takes effect in dramatic US trade shift

US President Donald Trump's widest-ranging tariffs to date took effect on Saturday, in a move which could trigger retaliation and escalating trade tensions that could upset the global economy.

A 10 percent "baseline" tariff came into place past midnight, hitting most US imports except goods from Mexico and Canada as Trump invoked emergency economic powers to address perceived problems with the country's trade deficits.

The trade gaps, said the White House, were driven by an "absence of reciprocity" in relationships and other policies like "exorbitant value-added taxes."

Come April 9, around 60 trading partners - including the European Union, Japan and China - are set to face even higher rates tailored to each economy.

Already, Trump's sharp 34-percent tariff on Chinese goods, set to kick in next week, triggered Beijing's announcement of its own 34-percent tariff on US products from April 10.

Beijing also said it would sue the United States at the World Trade Organization and restrict the export of rare earth elements used in high-end medical and electronics technology.

But other major trading partners held back as they digested the unfolding international standoff and fears of a recession.

Trump warned on Friday on social media that "China played it wrong," saying this was something "they cannot afford to do."

Markets collapse

Wall Street went into freefall on Friday, following similar collapses in Asia and Europe.

Economists have also warned that the tariffs could dampen growth and fuel inflation.

However, Trump said on his Truth Social platform that his "policies will never change."

Trump's latest tariffs have notable exclusions, however. They do not stack on recently imposed 25-percent tariffs hitting imports of steel, aluminum and automobiles. Also temporarily spared are copper, pharmaceuticals, semiconductors and lumber, alongside "certain critical minerals" and energy products, the White House said.

But Trump has ordered investigations into copper and lumber, which could lead to further duties soon.

He has threatened to hit other industries like pharmaceuticals and semiconductors as well, meaning any reprieve might be limited.

Canada and Mexico are unaffected as they face separate duties of up to 25 percent on goods entering the United States outside a North American trade agreement.

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Source: TRT