Trump's trade war has rocked global markets wiping trillions of dollars off the value of companies. From Wall Street to the Japanese stock market, there was nowhere unaffected after the US president slapped tariffs on nearly every country around the world.
Trump's claim is that his tariffs are a way of bringing industry back to the United States and to Make America Wealthy Again. But his sledgehammer approach with apparently random targeting has left many outside his circle bewildered and confused, as well as panicked.
Trump's tariffs ranged from a flat rate of 10% up to 50% with no particular logic as per its targeting [BBC]. The UK, a country with a supposed 'special relationship', with America was hit with a 10% tariff along with the likes of Brazil, Argentina, Australia and Ukraine. Most of those hit with 10% tariffs had a less than 1% share of US imports, though there were some exceptions with Brazil, Singapore and the UK all providing a little more than 1%. However there were some countries in the bracket of sending small amounts of exports and yet were hit with punitive tariffs. Angola and Algeria were hit with tariffs of some 30% despite providing less that 1% of US imports while Vietnam was hit with 46% tariffs while sending around 4.2% of American imports, primarily computers, electrical products, machinery, apparel and footwear. Bizarrely the Falkland Islands, a British overseas territory, was itself hit with a separate 42% tariff despite sending only around $27.4m [£21.2m] of goods to the US per year, as of 2023, mostly non-fillet frozen fish. In contrast, the Observatory of Economic Complexity [OEC] said the US exported $329,000 (£255,000) of goods to the Falklands.
The islanders were surprised, shocked, and angry to be placed in Trump's "worst offenders" list. With a population of about 3,600 people, the Falkland Islands has little room to manoeuvre. There has been little coverage concerning one of Britain's territories being slapped with such punitive tariffs with the UK prime minister conveniently ignoring the issue while talking of a calm and pragmatic approach to Trump's trade war on the world.
There have been some lone voices with the Liberal Democrat leader Sir Ed Davey urging the prime minister Sir Keir Starmer to urgently meet Falklands Governor Alison Blake to discuss the impact of the tariffs. Describing it as an "outrageous act of aggression", Sir Ed said that "Trump's trade war could be the biggest threat facing the Falklanders since Argentina's invasion." [BBC]
Such apparent random and arbitrary attacks could be potentially explained by so-called trade deficits, in that some places buy less from the US than is sent to the United States. But this does not explain why two uninhabited territories were hit with 10% tariffs.
There was much made of a 10% tariff levied at the Heard and McDonald Islands, an overseas territory belonging to Australia. The tiny group of islands in the Antarctic are home only to penguins and a few other animals and exports nothing. And also on the list were the Svalbard and Jan Mayen islands which belong to Norway. Despite having virtually no economy the islands were slapped with a 10% tariff while Norway was levied a 15% tariff.
Meanwhile the French territories of Guadeloupe and Martinique in the Caribbean, French Guiana in South America and the islands of Mayotte, in the Indian Ocean were singled out for 10% tariffs while France itself, under the umbrella of the EU, faces a 20% tariff. Réunion island, another French territory, faces tariffs of 37% [Politico].
The disproportionate and apparently random list has puzzled economists and commentators. Why was an uninhabited island slapped with 10% tariffs? Why the disparity of tariffs on overseas territories owned by Britain and France and the mainland?
It's almost as though the numbers and countries were plucked out of a hat. Indeed there have even been suggestions the plan was drawn up with the help of AI [Guardian / The Verge / Newsweek]. This has been denied by the US Secretary of Commerce Howard Lutnick however [CBS].
Soon after the tariffs were announced the White House published a formula with which it had calculated its sums [Newsweek / USTR / BBC / YouTube].
Even if actual economists were working out the levies on paper, many were critical of the methodology and claimed it did not make sense [AEI].
Trade deficits with a given country are not determined only by tariffs and non-tariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography amongst other things. It is all very well to suggest the EU take more US cars or other countries or territories take more American goods, but it may not be practical or financially viable for such places.
The EU and the UK don't buy American cars because they don't like such vehicles. Whilst there are safety rules sometimes prohibiting certain SUVs and large trucks on European roads, it is more the practical aspect that dissuades the consumer.
Many American vehicles are simply not economical enough and with fuel prices significantly higher in Europe it is not cost effective for people to buy such vehicles. Moreover many US vehicles are too big for European roads.
But is the trade war really about raising revenue as much as a policy of isolationism? According to Professor James Angel, who specialises in the market structure and regulation of global financial markets, Trump's trade war is driven by "extreme isolationists" that are "trashing 75 years of US policy".
Trump has publicly said he wants to clip the wings of China, as well as the EU who he has claimed was specifically "formed in order to screw the United States" [Sky News].
Of China he has particularly set his sights and taken aim with a series of tariffs which have levied 54% on all goods arriving on American shores.
But while the UK PM is resistant to retaliation and the EU is already attempting to negotiate with the Trump administration along with up to 70 other countries, China is not standing by idly.
China reacted to the compound tariffs with a retaliatory tariff of 34% having held emergency discussions on Friday 4th April despite it being a national holiday.
Trump was not amused and responded via social media post saying he would "impose ADDITIONAL Tariffs on China of 50%, effective April 9th," if China did not pull back [Truth Social]. But instead of pulling back China responded with a Foreign Ministry spokesperson saying China would "fight to the end".
"The US threat to escalate tariffs on China is a mistake on top of a mistake, China will never accept this," the spokesperson added [Xinhua / Axios], just hours before a 104% tariff was imposed on Chinese imports.
However the war of words could escalate into more than just a global recession as Goldman Sachs and others have already predicted.
There are concerns that China could escalate matters significantly. As of January 2025, China held approximately $760.8 billion in US Treasury securities, making it a significant foreign holder of US debt. In fact it is believed China may hold even more than this despite having been in a process of selling off its treasuries and building up its reserves of gold.
Should China opt to dump this government debt, the blow to the US would be seismic. Such a sell off would also hit global markets [Yahoo].
Many economists believe that China would be unlikely to make such a move since such a sell off could also hurt China. However with China having become less reliant on the dollar and built its gold reserves, whilst reinforcing its ties with BRICs and south-east Asian partners. China may feel emboldened enough to hit back hard [YouTube].
The trade war Trump has started has become a high stakes game of poker. It remains unclear who really holds the cards, but it is well known that China often keeps its cards close to its chest. In such a game however, the whole world may well get burned.
tvnewswatch, London, UK
Trump's claim is that his tariffs are a way of bringing industry back to the United States and to Make America Wealthy Again. But his sledgehammer approach with apparently random targeting has left many outside his circle bewildered and confused, as well as panicked.
Trump's tariffs ranged from a flat rate of 10% up to 50% with no particular logic as per its targeting [BBC]. The UK, a country with a supposed 'special relationship', with America was hit with a 10% tariff along with the likes of Brazil, Argentina, Australia and Ukraine. Most of those hit with 10% tariffs had a less than 1% share of US imports, though there were some exceptions with Brazil, Singapore and the UK all providing a little more than 1%. However there were some countries in the bracket of sending small amounts of exports and yet were hit with punitive tariffs. Angola and Algeria were hit with tariffs of some 30% despite providing less that 1% of US imports while Vietnam was hit with 46% tariffs while sending around 4.2% of American imports, primarily computers, electrical products, machinery, apparel and footwear. Bizarrely the Falkland Islands, a British overseas territory, was itself hit with a separate 42% tariff despite sending only around $27.4m [£21.2m] of goods to the US per year, as of 2023, mostly non-fillet frozen fish. In contrast, the Observatory of Economic Complexity [OEC] said the US exported $329,000 (£255,000) of goods to the Falklands.
The islanders were surprised, shocked, and angry to be placed in Trump's "worst offenders" list. With a population of about 3,600 people, the Falkland Islands has little room to manoeuvre. There has been little coverage concerning one of Britain's territories being slapped with such punitive tariffs with the UK prime minister conveniently ignoring the issue while talking of a calm and pragmatic approach to Trump's trade war on the world.
There have been some lone voices with the Liberal Democrat leader Sir Ed Davey urging the prime minister Sir Keir Starmer to urgently meet Falklands Governor Alison Blake to discuss the impact of the tariffs. Describing it as an "outrageous act of aggression", Sir Ed said that "Trump's trade war could be the biggest threat facing the Falklanders since Argentina's invasion." [BBC]
Such apparent random and arbitrary attacks could be potentially explained by so-called trade deficits, in that some places buy less from the US than is sent to the United States. But this does not explain why two uninhabited territories were hit with 10% tariffs.
There was much made of a 10% tariff levied at the Heard and McDonald Islands, an overseas territory belonging to Australia. The tiny group of islands in the Antarctic are home only to penguins and a few other animals and exports nothing. And also on the list were the Svalbard and Jan Mayen islands which belong to Norway. Despite having virtually no economy the islands were slapped with a 10% tariff while Norway was levied a 15% tariff.
Meanwhile the French territories of Guadeloupe and Martinique in the Caribbean, French Guiana in South America and the islands of Mayotte, in the Indian Ocean were singled out for 10% tariffs while France itself, under the umbrella of the EU, faces a 20% tariff. Réunion island, another French territory, faces tariffs of 37% [Politico].
The disproportionate and apparently random list has puzzled economists and commentators. Why was an uninhabited island slapped with 10% tariffs? Why the disparity of tariffs on overseas territories owned by Britain and France and the mainland?
It's almost as though the numbers and countries were plucked out of a hat. Indeed there have even been suggestions the plan was drawn up with the help of AI [Guardian / The Verge / Newsweek]. This has been denied by the US Secretary of Commerce Howard Lutnick however [CBS].
Soon after the tariffs were announced the White House published a formula with which it had calculated its sums [Newsweek / USTR / BBC / YouTube].
Even if actual economists were working out the levies on paper, many were critical of the methodology and claimed it did not make sense [AEI].
Trade deficits with a given country are not determined only by tariffs and non-tariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography amongst other things. It is all very well to suggest the EU take more US cars or other countries or territories take more American goods, but it may not be practical or financially viable for such places.
The EU and the UK don't buy American cars because they don't like such vehicles. Whilst there are safety rules sometimes prohibiting certain SUVs and large trucks on European roads, it is more the practical aspect that dissuades the consumer.
Many American vehicles are simply not economical enough and with fuel prices significantly higher in Europe it is not cost effective for people to buy such vehicles. Moreover many US vehicles are too big for European roads.
But is the trade war really about raising revenue as much as a policy of isolationism? According to Professor James Angel, who specialises in the market structure and regulation of global financial markets, Trump's trade war is driven by "extreme isolationists" that are "trashing 75 years of US policy".
Trump has publicly said he wants to clip the wings of China, as well as the EU who he has claimed was specifically "formed in order to screw the United States" [Sky News].
Of China he has particularly set his sights and taken aim with a series of tariffs which have levied 54% on all goods arriving on American shores.
But while the UK PM is resistant to retaliation and the EU is already attempting to negotiate with the Trump administration along with up to 70 other countries, China is not standing by idly.
China reacted to the compound tariffs with a retaliatory tariff of 34% having held emergency discussions on Friday 4th April despite it being a national holiday.
Trump was not amused and responded via social media post saying he would "impose ADDITIONAL Tariffs on China of 50%, effective April 9th," if China did not pull back [Truth Social]. But instead of pulling back China responded with a Foreign Ministry spokesperson saying China would "fight to the end".
"The US threat to escalate tariffs on China is a mistake on top of a mistake, China will never accept this," the spokesperson added [Xinhua / Axios], just hours before a 104% tariff was imposed on Chinese imports.
However the war of words could escalate into more than just a global recession as Goldman Sachs and others have already predicted.
There are concerns that China could escalate matters significantly. As of January 2025, China held approximately $760.8 billion in US Treasury securities, making it a significant foreign holder of US debt. In fact it is believed China may hold even more than this despite having been in a process of selling off its treasuries and building up its reserves of gold.
Should China opt to dump this government debt, the blow to the US would be seismic. Such a sell off would also hit global markets [Yahoo].
Many economists believe that China would be unlikely to make such a move since such a sell off could also hurt China. However with China having become less reliant on the dollar and built its gold reserves, whilst reinforcing its ties with BRICs and south-east Asian partners. China may feel emboldened enough to hit back hard [YouTube].
The trade war Trump has started has become a high stakes game of poker. It remains unclear who really holds the cards, but it is well known that China often keeps its cards close to its chest. In such a game however, the whole world may well get burned.
tvnewswatch, London, UK
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