tariff

'Frightening': US restaurants, producers face tariff whiplash

BY BEIYI SEOW

This week, Trump unveiled a sweeping 10 percent tariff on most US trading partners, set to take effect on Saturday.

From European wines to industrial tools, global tariffs launched by US President Donald Trump this week promise to sweep through the world's biggest economy, impacting everyone from restaurant owners to industrial manufacturers.
This week, Trump unveiled a sweeping 10 percent tariff on most US trading partners, set to take effect on Saturday.

From European wines to industrial tools, global tariffs launched by US President Donald Trump this week promise to sweep through the world's biggest economy, impacting everyone from restaurant owners to industrial manufacturers.

For Brett Gitter, who makes his quality control instruments in China-based factories, Trump's planned tariff hike on goods from the country marks a further price surge to potentially startling levels for customers.

"I add a surcharge at the bottom of every invoice to cover the expense of the tariff," he told AFP.

"The bottom of the invoice now is going to say 54 percent," he added, referring to a new rate hitting Chinese imports starting next Wednesday.

All of this stacks on an existing 25 percent rate Chinese imports already faced before Trump returned to the presidency, he said, although he tried to absorb some of the earlier duties.

"That's a lot," he added. "That's going to alarm people."

This week, Trump unveiled a sweeping 10 percent tariff on most US trading partners, set to take effect on Saturday.

He declared that foreign trade practices have caused a "national emergency," imposing levies to boost his country's position.

Additionally, "worst offenders" that have large trade imbalances with the United States will face even higher rates come April 9.

The list covers about 60 partners including the European Union, China, India and Japan.

Gitter said his customers, who are American manufacturers too, will have to decide if they want to foot the higher bill.

"Other countries that have similar types of product have added tariffs too," he said.

"Where does my product made in China fit, and how bad does it take a hit compared to other competitors?"

'Frightening'

Andrew Fortgang, who runs three restaurants and a wine shop in Oregon, worries about Trump's additional 20 percent tariff on European Union imports -- specifically, wine.

The rate is also taking effect April 9.

"Probably 25 percent of our revenue is from imported wine," he told AFP, noting that the steep tariff will bite.

For these sales to vanish would be "really frightening," he said.

Beyond that, "everything from oil, to mustards, cheeses, and meats, they are just not fungible, they are not made here," Fortgang said. "It's going to add up."

While he expects he would be forced to pass on some costs to consumers by hiking menu prices, high inflation after the Covid-19 pandemic have weighed on customers.

"You'll kind of reach a tipping point," he said, "on how much you can raise prices."

US Wine Trade Alliance president Ben Aneff called the plan "a disaster for small businesses."

"Restaurants really rely on large margins in order to effectively subsidize the rest of their business," he said, adding that consumers will likely see higher prices.

"We import about $4.5 billion worth of (wine) from the EU and US businesses make almost $25 billion from those imports. There is no plug for that hole," he told AFP.

Others in the food and beverages sector have already been hit by Trump's multiple waves of tariffs.

Bill Butcher, a craft brewer in Virginia, earlier saw a shortage of glass bottles for his beers when metals tariffs took effect in March -- as industry giants pivoted away from aluminum cans to avoid added costs.

Now, he awaits suppliers' verdict on how much the incoming tariffs on European goods will add to costs for the grains and hops needed in his brews.

"It's just a lot of uncertainty and chaos in our supply chain," he said.

Hard to relocate

Gitter, whose business is based in New Jersey, has tried "many times" to relocate production to the United States.

"There's a lack of infrastructure in the US to support what we do," he said.

The printed circuit boards used in his instruments, for example, require chips made in East Asia.

Will Thomas, whose company transforms coils of steel into metal products, added: "We import from necessity, not desire."

While he is not hard hit by Trump's partner-based tariffs this week, earlier 25 percent duties on steel and aluminum imports have eaten away at his profits.

"I'm hoping this is not another nail in the coffin for foreign supply," Thomas said.

"I would just like the leaders of the countries to be able to sit down and work things out."

bys/jgc

tariff

Trump defiant as tariffs send world markets into panic

BY SEBASTIAN SMITH

"Let Donald Trump run the global economy.

Wall Street led a global markets bloodbath Thursday as countries around the world reeled from President Donald Trump's trade war, while the White House insisted the US economy will emerge victorious.
"Let Donald Trump run the global economy.

Wall Street led a global markets bloodbath Thursday as countries around the world reeled from President Donald Trump's trade war, while the White House insisted the US economy will emerge victorious.

Shock waves tore through markets in the United States, Europe and Asia after Trump's tariff bombshell, as foreign leaders signaled readiness to negotiate but also threatened counter-tariffs.

The S&P 500 dropped 4.8 percent in its biggest loss since 2020. The tech-rich Nasdaq plummeted 6.0 percent and the Dow Jones 4.0 percent.

Tokyo's key Nikkei 225 index was down 1.8 percent in early trade Friday.

Trump slapped 10 percent import duties on all nations and far higher levies on imports from dozens of specific countries -- including top trade partners China and the European Union.

Separate tariffs of 25 percent on all foreign-made cars also went into effect, and Canada swiftly responded with a similar levy on US imports.

Stellantis -- the owner of Jeep, Chrysler and Fiat -- paused production at some Canadian and Mexican assembly plants.

Trump dismissed the turmoil, insisting to reporters as he left for a weekend at his Florida golf resort that stocks will "boom."

Vice President JD Vance, in an interview with Newsmax, also played down the market turbulence.

"I frankly thought in some ways it could be worse in the markets, because this is a big transition," Vance said.

'Trust Donald Trump'

Trump says he wants to make the United States free from reliance on foreign manufacturers, in a massive economic reshaping that he likened to a medical procedure.

"It's what is expected," the 78-year-old president said of the market reaction. "The patient was very sick. The economy had a lot of problems."

"It went through an operation. It's going to be a booming economy. It's going to be amazing."

Amid howls of protest abroad and from even some of Trump's Republicans, who fear price rises at home, Commerce Secretary Howard Lutnick urged patience.

"Let Donald Trump run the global economy. He knows what he's doing," Lutnick said on CNN

Trump reserved some of the heaviest blows for what he called "nations that treat us badly."

That included an additional 34 percent on goods from China -- bringing the new added tariff rate there to 54 percent.

The figure for the European Union was 20 percent, and 24 percent on Japan.

China demanded the tariffs be immediately canceled and vowed countermeasures, while France and Germany warned that the EU could hit back at US tech firms.

French President Emmanuel Macron called for suspending investment in the United States until what he called the "brutal" new tariffs had been "clarified."

IMF chief Kristalina Georgieva said the tariffs "clearly represent a significant risk to the global outlook."

She appealed to Washington and its trade partners to work "constructively" to resolve tensions and reduce uncertainty.

Gold -- a safe-haven investment -- hit a new record price, oil fell and the dollar slumped against other major currencies.

Global economic 'sumo wrestler'

Ngozi Okonjo-Iweala, head of the World Trade Organization, which helps manage global trading, warned the upheaval may lead to contraction of "one percent in global merchandise trade volumes this year."

Republican Senator Mitch McConnell broke ranks with Trump, slamming tariffs as "bad policy."

Preserving long-term prosperity "requires working with our allies, not against them," McConnell said.

Trump has said he would negotiate "as long as they are giving something that is good."

The 27-nation EU and other countries have sought to negotiate as they refrained from immediate retaliation.

Beijing said it was "maintaining communication" with Washington over trade issues, and EU trade chief Maros Sefcovic planned to speak with US counterparts on Friday.

But White House spokeswoman Karoline Leavitt told CNN earlier that the president made it clear "this is not a negotiation."

And Lutnick also struck a hard line, saying, "You can't really fight with the United States."

"You're going to lose. We are the sumo wrestler of this world."

burs-cl/st

tariff

Lesotho hardest hit as new US tariffs rattle Africa

BY JULIE BOURDIN

Kenya, on which Trump only imposed a baseline rate of 10 percent, said the new tariffs presented "both challenges and opportunities", giving it a "competitive edge" compared to other textile-exporting nations hit with much higher rates.

The small African kingdom of Lesotho said Thursday it would "urgently" send a government delegation to the United States to plead its case after Washington imposed 50-percent tariffs on its imports, the highest for a single nation.
Kenya, on which Trump only imposed a baseline rate of 10 percent, said the new tariffs presented "both challenges and opportunities", giving it a "competitive edge" compared to other textile-exporting nations hit with much higher rates.

The small African kingdom of Lesotho said Thursday it would "urgently" send a government delegation to the United States to plead its case after Washington imposed 50-percent tariffs on its imports, the highest for a single nation.

Other African countries hit with President Donald Trump's "reciprocal tariffs" above the new baseline rate of 10 percent include Madagascar (47 percent), Mauritius (40 percent), Botswana (37 percent), Equatorial Guinea (30 percent) and South Africa (30 percent).

"We need to urgently travel to the US to engage with its executives and plead our case," Trade Minister Mokhethi Shelile told reporters in Maseru, saying he feared "the immediate closure of factories and job losses".

Lesotho's annual gross domestic product of $2 billion is highly reliant on exports of mostly textiles, including jeans.

The clothing industry is the largest employer in the tiny kingdom of around 2.3 million people, which the US administration says is among "the worst offenders" with high tariffs on US imports.

"There are 11 factories in the country, most of which export goods to the US and provide employment to 12,000 workers," Shelile said, adding he had asked factories to continue operating "while we work on solutions" including "diversifying" its trade partnerships.

Lesotho is among the about 30 sub-Saharan African countries that benefit from duty-free access for some products to the US market through the African Growth and Opportunity Act (AGOA) deal.

In its reaction to the tariffs, Madagascar's government said Thursday it had approached the US embassy to "seek clarification and explore possibilities for adjusting these new tariff barriers".

The government will "mobilise all diplomatic and commercial levers to obtain a review of these measures", it said.

South African President Cyril Ramaphosa said the tariffs were "a barrier to trade and shared prosperity".

They underscore the urgent need for "a new bilateral and mutually beneficial trade agreement", he said. The United States is South Africa's second-largest trading partner.

The South African automotive sector, which accounts for 22 percent of exports to the US and also benefited under AGOA, will be among the hardest hit as separate tariffs of 25 percent on foreign-made cars came into effect shortly after Trump's late Wednesday proclamation.

Kenya, on which Trump only imposed a baseline rate of 10 percent, said the new tariffs presented "both challenges and opportunities", giving it a "competitive edge" compared to other textile-exporting nations hit with much higher rates.

End of AGOA?

The sweeping tariffs added to fears about the future of AGOA which is meant to be up for review in September.

"This must be the end of AGOA," said South African economist Dawie Roodt. "How can you have tariffs and AGOA? It doesn't make sense."

But senior Kenyan foreign affairs official Korir Sing'Oei said that, as AGOA falls under a Congressional framework, the new tariffs should not be applicable until the deal lapses or is repealed the US Congress.

Last month, Lesotho's King Letsie III told AFP a termination of AGOA could affect up to 40,000 jobs.

South African Minister of Trade Parks Tau said Thursday the intensifying global trade war would affect poorer countries most and "literally devastate" Lesotho.

"We now have to look amongst ourselves and say, within the customs union in Southern Africa, within the Southern African Development Community, and within the region of Africa, how we're going to respond to these issues," he told journalists.

"Diversifying our trade is going to be important... enhancing our work on the African continent and collaborating," he said.

South Africa "must see what trade adjustments might be made to win concessions to ameliorate the situation", said South Africa-based economics professor Raymond Parsons, adding Pretoria should "prudently seize the moment" to find alternative trading partners.

However, "everybody is going to look for new trading partners," Roodt said. "Of course, we must try. But it's going to be tough."

jcb/br/cw

tariff

Penguin memes take flight after Trump tariffs remote island

"The penguins have been ripping us off for years," Anthony Scaramucci, who was Trump's former communications chief for 11 days in his first term and is now a vocal critic, joked on X. "Donald Trump slapped tariffs on penguins and not on Putin," posted US Senate Democratic leader Chuck Schumer, referring to the fact that Russia was not on the US tariff list.

Donald Trump's tariffs have become a black and white issue on social media, where penguin memes have gone viral after he targeted an island inhabited by the flightless birds, but no people.
"The penguins have been ripping us off for years," Anthony Scaramucci, who was Trump's former communications chief for 11 days in his first term and is now a vocal critic, joked on X. "Donald Trump slapped tariffs on penguins and not on Putin," posted US Senate Democratic leader Chuck Schumer, referring to the fact that Russia was not on the US tariff list.

Donald Trump's tariffs have become a black and white issue on social media, where penguin memes have gone viral after he targeted an island inhabited by the flightless birds, but no people.

One widely shared image on Thursday showed a penguin in place of Ukrainian leader Volodymyr Zelensky in the Oval Office during his recent row with the US president and Vice President JD Vance.

Another meme showed US First Lady Melania Trump gazing up at an emperor penguin -- in place of former Canadian Prime Minister Justin Trudeau -- while Trump looks askance.

Trump's announcement of worldwide tariffs on Wednesday certainly received an icy reception in many countries.

But there has also been bafflement about why some of the most remote parts of the world have been targeted.

A case in point: why would Trump slap 10 percent tariffs on all exports from the Heard and McDonald Islands, a barren sub-Antarctic Australian territory without a human population, but four different species of penguin?

"The penguins have been ripping us off for years," Anthony Scaramucci, who was Trump's former communications chief for 11 days in his first term and is now a vocal critic, joked on X.

"Donald Trump slapped tariffs on penguins and not on Putin," posted US Senate Democratic leader Chuck Schumer, referring to the fact that Russia was not on the US tariff list.

The White House said sanctions on Russia over President Vladimir Putin's war on meant that there was no "meaningful" trade on which to impose tariffs.

Trump also caused puzzlement with his 29 percent tariff on Norfolk Island, a tiny Australian territory in the Pacific with a population of a little over 2,000 humans.

"I'm not quite sure that Norfolk Island, with respect to it, is a trade competitor with the giant economy of the United States," Australian Prime Minister Anthony Albanese said.

Britain's remote Falkland Islands -- home to one million penguins, and most famous for a 1982 war fought by Britain to repel Argentinian invaders -- was hit by 41 percent exports even though the UK only faces 10 percent.

Trump's tariffs have however been no laughing matter for global markets, with US stocks suffering their worst day since the Covid pandemic in 2020.

dk/st

tariffs

Where Trump's tariffs could hurt Americans' wallets

BY DANIEL AVIS

Yale's Budget Lab estimated the effect of recent tariffs, up to and including Wednesday's announcement, would cause a 17 percent rise in the cost of clothing and textiles.

As global financial markets plunge in the wake of US President Donald Trump's "Liberation Day" tariffs, Americans must also grapple with the potentially long-lasting impact of the move on household budgets.
Yale's Budget Lab estimated the effect of recent tariffs, up to and including Wednesday's announcement, would cause a 17 percent rise in the cost of clothing and textiles.

As global financial markets plunge in the wake of US President Donald Trump's "Liberation Day" tariffs, Americans must also grapple with the potentially long-lasting impact of the move on household budgets.

The tariffs -- which are paid in the first instance by US importers -- will likely push up the price of many household items in the United States and reduce consumers' spending power.

Grocery store costs

The US imports a growing share of the fresh fruits and vegetables consumed each year, according to the US Department of Agriculture (USDA).

Many of the fresh goods come from Canada and Mexico, two countries not immediately affected by the tariffs announced Wednesday.

But other goods will be hit by the stinging duties set to come into effect this month.

For example, the United States imports large quantities of bananas from the Latin American countries of Guatemala, Ecuador and Costa Rica, which will all face a 10 percent tariff from April 5.

Coffee -- around 80 percent of which is imported, according to the USDA -- is likely to see a price increase, given that top exporters Brazil and Colombia will also face the new baseline 10 percent rate.

Olive oil and alcohol imports from Italy, Spain and Greece will be hit with a new 20 percent levy against the European Union from April 9.

And Thai jasmine rice and Indian basmati rice will face tariffs of 36 percent and 26 percent respectively, while Indian shrimp -- which the US imports large quantities of -- will face the same 26 percent rate.

Electronics and cars

Consumer electronics are also set to be hit with steep tariffs this month, given how many of products are manufactured or assembled in India and China.

Despite moves to expand its supply chain, Apple still makes the vast majority of its iPhones in China, through supplier Foxconn, where hardware exports will be hit with a tariff totaling 54 percent from April 9.

Apple analyst Ming-Chi Kuo predicted that US buyers of high-end iPhones, who account for as much as 70 percent of sales, are "relatively more accepting of price increases."

On top of the measures announced Wednesday, the Trump administration has also rolled out a 25 percent tariff against vehicles not made in the United States -- a step analysts have warned could add thousands to the cost of the average car.

Shoes, clothes

Shares of clothing and textile companies, which rely on cheap labor in countries including China and Vietnam, fell sharply Thursday, with Nike sinking more than 13 percent and Gap tanking more than 20 percent.

The new tariffs announced Wednesday mean imports to the United States from China and Vietnam will be taxed at 54 percent and 46 percent respectively.

Yale's Budget Lab estimated the effect of recent tariffs, up to and including Wednesday's announcement, would cause a 17 percent rise in the cost of clothing and textiles.

The think tank calculated that the overall effect on prices of the tariffs announced so far was equivalent to an average per household consumer loss of $3,800.

Speaking to reporters on Thursday, Trump insisted that tariffs would make the United States "very rich."

"The operation is over," he said, referring to the recent tariff announcement. "And now we let it settle in."

da/sla/acb

merger

Trump says 'very close to a deal' on TikTok

Trump has downplayed risks that TikTok is in danger of being banned in the United States, saying he remains confident of finding a buyer for the app's US business.

President Donald Trump said his administration was "very close" to a deal to find a buyer for TikTok, which faces a US ban if not sold by its Chinese owner by the weekend.
Trump has downplayed risks that TikTok is in danger of being banned in the United States, saying he remains confident of finding a buyer for the app's US business.

President Donald Trump said his administration was "very close" to a deal to find a buyer for TikTok, which faces a US ban if not sold by its Chinese owner by the weekend.

"We're very close to a deal with a very good group of people," Trump told reporters aboard Air Force One, adding that it involved "multiple" investors but giving no further details.

The hugely popular video-sharing app, which has over 170 million American users, is under threat from a US law that passed overwhelmingly last year and orders TikTok to split from its Chinese owner ByteDance or face a ban in the United States.

Motivated by national security fears and widespread belief in Washington that TikTok is ultimately controlled by the Chinese government, the law took effect on January 19, one day before Trump's inauguration.

But the Republican president quickly announced a delay that has allowed it to continue to operate; that delay is set to expire on April 5.

Trump has downplayed risks that TikTok is in danger of being banned in the United States, saying he remains confident of finding a buyer for the app's US business.

The US president also suggested TikTok could even be part of a broader deal with China to ease the stinging tariffs he imposed on Beijing as part of a worldwide blitz of levies.

Asked Thursday if he was willing to make deals with countries on tariffs, he said: "As long as they are giving us something that is good. For instance with TikTok."

He added: "We have a situation with TikTok where China will probably say we'll approve a deal but will you do something on the tariffs. The tariffs give us great power to negotiate."

According to reports, the most likely solution would see existing US investors in ByteDance roll over their stakes into a new independent global TikTok company.

Additional US investors, including Oracle and Blackstone, the private equity firm, would be brought on to reduce the proportion of Chinese investors.

Much of TikTok's US activity is already housed on Oracle servers, and the company's chairman, Larry Ellison, is a longtime Trump ally.

But uncertainty remains, particularly over what would happen to TikTok's valuable algorithm. The New York Times suggested the new company could licence it from ByteDance.

Amazon has also reportedly made a last-minute bid to buy TikTok.

dk/st

trade

Trump tariffs on Mexico: the good, the bad, the unknown

BY JEAN ARCE

A day after the tariffs were announced, the shockwaves are still being felt.

At first glance, Mexico got off lightly from Donald Trump's "Liberation Day" tariffs blitz.
A day after the tariffs were announced, the shockwaves are still being felt.

At first glance, Mexico got off lightly from Donald Trump's "Liberation Day" tariffs blitz.

The US president has repeatedly threatened the United States' top trading partner with punishing tariffs over illegal migration and drug smuggling.

So it was a surprise when he left Mexico off the list of nations on which he imposed levies ranging from 10 to 50 percent.

The relief in Mexico, which has a free-trade deal with the United States and Canada, was tempered by concern over the 25-percent levies Trump slapped on foreign-made imported vehicles.

That includes some of the three million vehicles the Latin American country sends north across the border each year.

AFP looks at how Mexico, whose President Claudia Sheinbaum has been walking a diplomatic tightrope with Trump, fared generally:

- The good -

Mexico avoided the 10-percent blanket tariffs imposed by Trump on several Latin American countries, including ones with staunchly pro-Trump governments such as Argentina and El Salvador.

For the moment at least, some Mexican exports to the United States remain tariff-free.

Analysts at BBVA bank said the fact that Mexico faced a lower level of relative protectionism "could give it advantages in accessing the US market and, therefore, attracting investment."

They said it could act as an incentive for nearshoring -- companies moving their operations to Mexico from other countries to use it as a tariff-free or low-tariff port of entry to the United States.

"It would simply be more profitable or less expensive to export these goods from Mexico than from countries with higher tariffs," BBVA said.

During Trump's first presidency from 2017-2021, scores of Chinese companies relocated their production to northern Mexico to avoid tariffs -- a bone of contention for the Republican leader.

The bad

Parts of Mexico's vital automotive industry are reeling after being hit with 25 percent tariffs, which come a month after Trump imposed levies on other goods from Mexico and Canada not covered by the United States-Mexico-Canada-Agreement (USMCA) trade deal.

Mexico's steel and aluminum exports to the United States have, since March, also been subject to 25 percent tariffs.

"We shouldn't be subject to these tariffs simply because the USMCA agreement provides otherwise," Juan Francisco Torres-Landa, a partner at consulting firm Hogan Lovells in Mexico City, told AFP.

The automotive tariffs are particularly painful for Mexico.

In recent years, several major automakers including Ford, General Motors, BMW, and Audi have outsourced part of their production to Mexico because of its tariff-free access to the United States.

Under Trump's new rules, US vehicle parts will not face tariffs. But manufacturers say that with automotive components crossing the US-Mexico border multiple times during the assembly process, it is nearly impossible to ascertain which are American.

Torres-Landa called the provision "gibberish."

"A car must have about 10,000 parts; tracking them to see what you pay (tariffs) for and what you don't pay for is a very complex equation," he said.

A day after the tariffs were announced, the shockwaves are still being felt.

Stellantis (born out of the merger of Fiat Chrysler and Renault) said it would immediately pause production at some of its Mexican and Canadian plants.

Volkswagen, meanwhile, indicated it would halt rail shipments of vehicles made in Mexico to the United States, Automotive News said.

The Mexican government said Thursday that over the next 40 days it will attempt to negotiate "the best conditions" with the Trump administration for the automotive, steel, and aluminum industries.

The unknown

The uncertainty caused by Trump's repeated threats of steep tariffs has already caused a slowdown in manufacturing activity.

While the Mexican government has forecast economic growth of about 1.5 percent this year, analysts surveyed by the central bank said this week they expected it to come in much lower, at 0.5 percent.

In the country's northern industrial borderlands, home to thousands of factories built to serve the US market, Mexicans fear mass layoffs.

"I think difficult times are coming," trucker Omar Zepeda told AFP in the border city of Tijuana this week.

yug/cn/mlr/st

Global Edition

Trump tariffs hammer global stocks, dollar and oil

"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Stock markets and the dollar tumbled Thursday after President Donald Trump's latest worldwide tariff salvo fanned a trade war that many fear will spark recession and ramp up inflation.
"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Stock markets and the dollar tumbled Thursday after President Donald Trump's latest worldwide tariff salvo fanned a trade war that many fear will spark recession and ramp up inflation.

The dollar slumped by as much as 2.6 percent versus the euro, its biggest intraday plunge in a decade, and suffered sharp losses also against the yen and British pound.

On stock markets, Wall Street's tech-heavy Nasdaq Composite dove around six percent, while the retreat in the S&P 500 was its biggest in a day since 2020.

"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Shares in apparel companies, which rely on cheap labor in factories abroad, fell sharply with Nike sinking more than 11 percent and Gap tanking more than 20 percent.

Apple, whose iPhones are largely manufactured in China, fell over nine percent.

Across the globe shares in major sectors including auto, luxury and banking, also took big hits.

Shares in Jeep-maker Stellantis fell 7.5 percent after it said it would pause production at some plants in Canada and Mexico as 25 percent car tariffs came into force.

Tokyo's Nikkei briefly collapsed more than four percent. In Europe, both the Paris and Frankfurt stock exchanges finished the day with losses of more than three percent.

Oil prices plummeted more than six percent on concerns an economic downturn would hit demand.

Gold, a safe haven asset in times of uncertainty, hit a new peak of $3,167.84 an ounce before retreating somewhat.

Yields on government bonds fell as investors fled risky assets and piled into safe-haven treasuries.

Renewed rate cuts?

The panic came after the US president unveiled a blitz of harsher-than-expected levies aimed at countries he said had been "ripping off" the United States for years.

The measures included a 34 percent tariff on world number two economy China, 20 percent on the European Union and 24 percent on Japan.

A number of others will face specifically tailored tariff levels, and for the rest, Trump said he would impose a "baseline" tariff of 10 percent, including on Britain.

"Markets, unsurprisingly have reacted badly," noted Richard Carter, head of fixed interest research at wealth manager Quilter.

"(US) Treasury yields have fallen sharply, as investors take flight and look for safe haven assets.

"This would suggest the Federal Reserve will need to put additional rate cuts on the table to look to prevent recession being triggered, but should it face inflation rising too, it is in somewhat of a bind," Carter added.

As world markets tumbled, Trump acknowledged the shock brought by his tariffs, likening it to a medical "operation," but said the US economy would emerge "far stronger."

White House Press Secretary Karoline Leavitt appeared to rule out the possibility of Trump pulling back any of the tariffs before they are implemented over the coming weekend.

"The president made it clear yesterday this is not a negotiation," she said on CNN.

However, Trump later said he would negotiate "as long as they are giving something that is good."

Investors are bracing for retaliatory measures, but governments also left the door open for talks.

China vowed "countermeasures" and urged Washington to cancel the tariffs, while calling for dialogue.

European Union chief Ursula von der Leyen said the bloc was "preparing for further countermeasures" but she emphasised it was "not too late to address concerns through negotiations".

Key figures around 2200 GMT

New York - Dow: DOWN 4.0 percent at 40,545.93 (close)

New York - S&P 500: DOWN 4.8 percent at 5,396.52 (close)

New York - Nasdaq Composite: DOWN 6.0 percent at 16,550.61 (close)

Paris - CAC 40: DOWN 3.3 percent at 7,598.98 (close)

Frankfurt - DAX: DOWN 3.0 percent at 21,717.39 (close)

London - FTSE 100: DOWN 1.6 percent at 8,474.74 (close)

Tokyo - Nikkei 225: DOWN 2.8 percent at 34,735.93 (close)

Hong Kong - Hang Seng Index: DOWN 1.5 percent at 22,849.81 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,342.01 (close)

Euro/dollar: UP at $1.1050 from $1.0853 on Wednesday

Pound/dollar: UP at $1.3099 from $1.3007

Dollar/yen: DOWN at 145.99 yen from 149.28 yen

Euro/pound: UP at 84.34 pence from 83.44 pence

West Texas Intermediate: DOWN 6.6 percent at $66.95 per barrel

Brent North Sea Crude: DOWN 6.4 percent at $70.14 per barrel

burs-jmb/des

trade

Canada imposing 25% tariff on some US auto imports

Prime Minister Mark Carney announced "25 percent tariffs on all vehicles imported from the United States that are not compliant with CUSMA," using the Canadian acronym for an existing North American free trade agreement.

Canada said it would impose a 25 percent tariff on tens of thousands of vehicles imported from the United States, retaliating against US President Donald Trump's levies that came into effect on Thursday.
Prime Minister Mark Carney announced "25 percent tariffs on all vehicles imported from the United States that are not compliant with CUSMA," using the Canadian acronym for an existing North American free trade agreement.

Canada said it would impose a 25 percent tariff on tens of thousands of vehicles imported from the United States, retaliating against US President Donald Trump's levies that came into effect on Thursday.

Prime Minister Mark Carney announced "25 percent tariffs on all vehicles imported from the United States that are not compliant with CUSMA," using the Canadian acronym for an existing North American free trade agreement.

The tariffs on Can$35.6 billion (US$25.3 billion) worth of US vehicles are to come into force in the coming days, his office told AFP.

The Canadian tariffs will impact cars and light trucks that are made with less than 75 percent North American parts -- roughly 10 percent of all vehicles shipped from the United States to Canada, or about 67,000 vehicles annually.

Canada was largely spared from the sweeping global tariffs Trump announced Wednesday, as Washington granted an exemption to goods compliant with the US-Canada-Mexico free trade agreement, which covers most products.

But Canada, which is one of America's largest trading partners, is still facing tariffs on steel, aluminum and other products, in addition to the levies on automobiles.

Carney said Trump's trade war "will rupture the global economy."

"The system of global trade anchored in the United States that Canada has relied on since the end of the Second World War... is over," Carney said.

"The 80-year period when the United States embraced the mantle of global economic leadership, forged alliances rooted in trust and mutual respect, championed the free and open exchange of goods and services is over," he added, calling the development "a tragedy."

Ottawa has previously imposed retaliatory tariffs on Can$30 billion worth of US consumer goods and nearly Can$30 billion of US steel and aluminum imports into Canada.

Carney and Trump spoke by phone last week. They agreed Washington and Ottawa should negotiate the future of bilateral trade after Canada's April 28 election.

amc-bs/aha/st

tariff

Macron calls for suspension of investment in US until tariffs clarified

Macron predicted Americans will be "weaker and poorer" after Trump's tariff announcement, which he described as "brutal and unfounded" and which would have a "massive impact" on the European economy.

French President Emmanuel Macron on Thursday called for a suspension of investment in the United States until Donald Trump's "brutal and unfounded" new tariffs against Europe and the rest of the world were clarified.
Macron predicted Americans will be "weaker and poorer" after Trump's tariff announcement, which he described as "brutal and unfounded" and which would have a "massive impact" on the European economy.

French President Emmanuel Macron on Thursday called for a suspension of investment in the United States until Donald Trump's "brutal and unfounded" new tariffs against Europe and the rest of the world were clarified.

His comments followed President Trump imposing sweeping new levies on US trading partners, including a 20 percent tariff on imports from the European Union.

"Future investments, investments announced in the last weeks, should be suspended for a time for as long as the situation with the United States is not clarified," Macron told a meeting of French companies also attended by French ministers and Prime Minister Francois Bayrou.

Macron predicted Americans will be "weaker and poorer" after Trump's tariff announcement, which he described as "brutal and unfounded" and which would have a "massive impact" on the European economy.

He also called on Europe to stand together in terms of their response, warning against any unilateral action.

Macron reaffirmed the French government's position that a "European response" would come in "two stages".

One would come in mid-April, addressing US tariffs already in place on steel and aluminium. The second would be at the end of April and would be a "more massive response, to the tariffs announced," after a study of the sectors affected and coordination with EU member states.

"The world is reorganising"

Following the meeting, the head of French employers' federation Medef, Patrick Martin, stressed the situation was "very serious".

Everyone agreed that "the world is reorganising, trade relations are becoming extremely brutal, threats are accumulating, and the time has come more than ever to accelerate simplification and competitiveness at the European and French level," he said.

Echoing Macron's call, business group France Industrie, which represents dozens of major companies, said French manufacturers affected by US tariffs should consider firing back one way or another, including by suspending investment projects in the US.

"To negotiate from a position of strength, we have to be ready to use all the levers at our disposal," said the group's president, Alexandre Saubot.

French Overseas Minister Manuel Valls called the US decision to impose different tariffs on France's overseas territories a "deeply political" gesture that reveals an "accumulation of inconsistencies, absurdities and incompetence".

The Paris stock market closed down more than three percent on Thursday after Trump's tariff blitz -- the biggest daily decline in two years.

Vincent Vicard, an economist at the Centre for Prospective Studies and International Information, told AFP that Trump's announcements "blow up" the "basic rules of international trade", but that the EU was well equipped to respond.

Among other measures, Vicard said EU countries could reduce its imports of goods and services, reduce market access for American companies, or even suspend property rights for certain companies.

Direct French investments in the United States were worth $370 billion in 2023, making it the fifth-biggest foreign investor in the country, according to the US Bureau of Economic Analysis (BEA).

In comparison, US direct investment in France the same year came to $142 billion, according to France's central bank. They are heavily weighted towards the manufacturing sector, France's treasury said.

The American Chamber of Commerce in France told AFP that there are more than 4,200 subsidiaries of French companies operating in the United States. According to the BEA, they employ some 741,000 people.

burs/djt/rmb

tariff

Stellantis pausing some Canada, Mexico production over Trump auto tariffs

BY ANNE-MARIE PROVOST

The announcement from Stellantis -- which owns Chrysler, Jeep and Dodge, among other major brands -- impacts thousands of workers who have faced fear and uncertainty amid Trump's efforts to force companies to make more vehicles in the United States.

Auto giant Stellantis said Thursday it was pausing production at some plants in Canada and Mexico, a major disruption for the sector on the day US President Donald Trump's auto tariffs came into force.
The announcement from Stellantis -- which owns Chrysler, Jeep and Dodge, among other major brands -- impacts thousands of workers who have faced fear and uncertainty amid Trump's efforts to force companies to make more vehicles in the United States.

Auto giant Stellantis said Thursday it was pausing production at some plants in Canada and Mexico, a major disruption for the sector on the day US President Donald Trump's auto tariffs came into force.

The announcement from Stellantis -- which owns Chrysler, Jeep and Dodge, among other major brands -- impacts thousands of workers who have faced fear and uncertainty amid Trump's efforts to force companies to make more vehicles in the United States.

"Stellantis continues to assess the effects of the recently announced US tariffs on imported vehicles," a company statement said.

"Immediate actions we must take include temporarily pausing production at some of our Canadian and Mexican assembly plants," it added.

Vehicle production in North America is highly integrated and the full impact of Trump's 25 percent levy on foreign-made vehicles and parts, which came into effect on Thursday, remains unclear.

Individual parts can cross the US-Canada border several times during the assembly process.

Trump's tariffs will apply only to a vehicle's non-American components and adhering to the policy could cause headaches at the border.

Stellantis said it would "continue to engage with the US administration" on the new policies.

The company confirmed the Chrysler plant in the Canadian city of Windsor, across a river from US auto capital Detroit, will pause production from April 7 to 21.

The factory, which employs around 4,000 people and is one of three Stellantis has in Canada, manufactures the Chrysler Pacifica minivan and the electric version of the Dodge Charger.

Canada's Prime Minister Mark Carney said Wednesday he stood "in solidarity with those workers in Windsor and all those hurt by President Trump's tariffs."

Carney said Canada would retaliate by imposing a 25 percent tariff on all autos imported from the United States that are not compliant with an existing North American free trade deal -- roughly 10 percent of all vehicles shipped from the United States to Canada, or about 67,000 vehicles annually.

'Everybody's uncertain'

Windsor has been on edge since Trump first announced his plans for auto sector tariffs.

US auto companies have employed people in the city for more than a century and the industry is vital to the local economy.

Detroit and Windsor are connected by a suspension bridge and tunnel, with people crossing back and forth daily.

Outside the Stellantis plant on Thursday, 58-year-old auto worker David Lumley told AFP Trump was making "a big mistake."

"We're all intertwined," he said.

A two-week production pause was manageable, he said, but warned: "We don't know what's going to happen after the two weeks," raising concern Windsor's auto industry could ultimately shut down.

"This Donald Trump, you don't know what he's going to do," Lumley said.

Trump has publicly told auto companies that to avoid tariffs they need to build plants in the United States and employ American workers.

Industry experts note North American production chains have developed to maximize efficiency and unwinding those links to relocate jobs to the United States would take years, if not decades.

On a break outside the Windsor plant, Philip Sauve rejected Trump's suggestion that he had taken a job which rightfully belongs to an American.

"I feel like these jobs have been ours for a long time and I don't really feel like we've taken anything from them," he told AFP.

Trump and Carney spoke last week and agreed Washington and Ottawa should discuss the broader future of bilateral trade after Canada's April 28 election.

"You feel nervous and you don't know what the future's going to be like," Sauve said.

He told AFP his job "provided a good situation at home... Food on the table and a house and a pretty good life so far and I would like to continue that."

burs-amp-bs/jhb

Fed

US tariffs could push up inflation, slow growth: Fed official

"Such scenarios, with higher initial inflation and slower growth, could pose challenges for monetary policy," she added, alluding to the challenges that the Fed would face, seeking to lower inflation without then sparking a spike in the unemployment rate.

The trade uncertainty fueled by recent tariffs will likely raise the risks of higher inflation and slower growth, and pose challenges for Federal Reserve policy, a senior banking official said Thursday.
"Such scenarios, with higher initial inflation and slower growth, could pose challenges for monetary policy," she added, alluding to the challenges that the Fed would face, seeking to lower inflation without then sparking a spike in the unemployment rate.

The trade uncertainty fueled by recent tariffs will likely raise the risks of higher inflation and slower growth, and pose challenges for Federal Reserve policy, a senior banking official said Thursday.

As the US central bank, the Fed has a dual mandate to tackle inflation and unemployment, and faces the unenviable task of charting a path through the uncertainty thrown up by President Donald Trump's tariff announcement on Wednesday, which has roiled financial markets.

Inflation remains stuck above the Fed's long-term target of two percent, while growth has been solid and unemployment has hugged close to record lows. Against this backdrop, and the looming threat of additional tariffs, it paused rate cuts in recent months.

Speaking in Pennsylvania on Thursday, Federal Reserve board of governors member Lisa Cook said her baseline forecast still expects growth to slow "moderately" this year, with an uptick in inflation and a stalled inflation fight, "in part because of tariffs and other policy changes."

While it is possible that the disruption from tariffs could be minimal, Cook said in prepared remarks that she placed "more weight on scenarios where risks are skewed to the upside for inflation and to the downside for growth."

"Such scenarios, with higher initial inflation and slower growth, could pose challenges for monetary policy," she added, alluding to the challenges that the Fed would face, seeking to lower inflation without then sparking a spike in the unemployment rate.

Cook said she was also closely monitoring whether a short-term spike in inflation could spark "more widespread" price increases.

"Tariffs on steel and aluminum have already raised prices for those manufacturing inputs," she said. "As those cost increases work their way through the manufacturing process, they could boost prices of a range of goods over time."

Using the motor vehicle industry as an example, Cook noted that the combined effect of steel and aluminum tariffs and auto levies could affect the price of new cars, feeding through into higher prices for used vehicles.

"And, as seen in recent years, higher prices for motor vehicles could, with a lag, raise costs for related services, such as rentals, insurance, and car repair," she said.

"Amid growing uncertainty and risks to both sides of our dual mandate, I believe it will be appropriate to maintain the policy rate at its current level while continuing to vigilantly monitor developments that could change the outlook," she added.

da/sla/acb

tariff

Mexico president welcomes being left off Trump's tariffs list

Mexico's economy is considered one of the most vulnerable to Trump's tariffs due to its close trade relations with the United States and their joint membership of the US-Mexico-Canada Agreement (USMCA) on free trade.

President Claudia Sheinbaum of Mexico, the United States' top trading partner, on Thursday welcomed her country's exclusion from the list of nations targeted in Donald Trump's latest round of import tariffs.
Mexico's economy is considered one of the most vulnerable to Trump's tariffs due to its close trade relations with the United States and their joint membership of the US-Mexico-Canada Agreement (USMCA) on free trade.

President Claudia Sheinbaum of Mexico, the United States' top trading partner, on Thursday welcomed her country's exclusion from the list of nations targeted in Donald Trump's latest round of import tariffs.

Sheinbaum told reporters Mexico was spared thanks to her government's "good relationship" with the US administration.

Mexico's economy is considered one of the most vulnerable to Trump's tariffs due to its close trade relations with the United States and their joint membership of the US-Mexico-Canada Agreement (USMCA) on free trade.

More than 80 percent of Mexican exports go to the United States, including about three million vehicles a year.

The Latin American nation is home to many foreign-owned vehicle assembly plants operated by companies including Ford, General Motors, BMW, Volkswagen and Toyota.

Trump has slapped a 25 percent import tariff on foreign-made cars and light trucks, effective from Thursday, though with some exceptions for USMCA-covered vehicles and parts.

The move prompted multinational car company Stellantis, which has plants in the Mexican cities of Toluca and Saltillo, to announce Thursday it was pausing production in Mexico, where it makes Dodge cars and Ram trucks.

The company has similarly announced it will shutter its Chrysler factory in the Canadian city of Windsor, at least temporarily.

'Major achievement'

Mexico's Economy Secretary Marcelo Ebrard said Thursday the USMCA remained intact, which he described as a "major achievement."

He said Mexico would, in the next 40 days, seek "the best conditions" for bilateral trade in automobiles, steel and aluminum.

"We must always be thankful for the willingness of the President of the United States to engage in dialogue with respect to our country," Sheinbaum said at an event later Thursday with business leaders.

Trump had previously threatened Mexico and Canada with a general 25 percent tariff on all goods, accusing its neighbors of allowing trafficked drugs and undocumented migrants into the United States.

Most have been suspended, but tariffs on Mexican goods not covered by the USMCA have entered into force.

About 50 percent of Mexican exports fall under the trade agreement, according to analysts' estimates -- coverage Sheinbaum wants to expand to 100 percent.

Her government is expected to present a "comprehensive" strategy soon as part of its so-called "Mexico Plan" to boost the economy in the face of Washington's tariff onslaught.

yug/mar/mlr/des/aha

Zuckerberg repeats Trump visits in bid to settle antitrust case

The New York Times reported that Zuckerberg has visited Trump at both the White House and his Mar-a-Lago resort several times in recent weeks as he makes a last-ditch attempt to spare his company the seven- to eight-week trial.

Meta boss Mark Zuckerberg has made repeated visits to the White House as he tries to persuade US President Donald Trump to settle a major antitrust case before it goes to trial on April 14, US media reported.
The New York Times reported that Zuckerberg has visited Trump at both the White House and his Mar-a-Lago resort several times in recent weeks as he makes a last-ditch attempt to spare his company the seven- to eight-week trial.

Meta boss Mark Zuckerberg has made repeated visits to the White House as he tries to persuade US President Donald Trump to settle a major antitrust case before it goes to trial on April 14, US media reported.

The case against Meta was filed in 2020 by the Federal Trade Commission and seeks to prove that the company formerly known as Facebook illegally acquired potential competitors, particularly Instagram and WhatsApp, to eliminate competitive threats.

The New York Times reported that Zuckerberg has visited Trump at both the White House and his Mar-a-Lago resort several times in recent weeks as he makes a last-ditch attempt to spare his company the seven- to eight-week trial.

The trial is to take place in a Washington federal court, with Zuckerberg and former executive Sheryl Sandberg among those to take the stand.

Contacted by AFP, a Meta spokesman said: "Mark's continuing the meetings he's been holding with the administration on American technology leadership."

Since Trump took back the White House, Zuckerberg has courted the president with frequent visits and notable changes to corporate policies on matters like content moderation, aligning himself politically with the Republican administration.

Zuckerberg has also bought a $23 million residence in the US capital in recent weeks as he steps up his lobbying of Trump.

The case from the FTC focuses on Meta's acquisitions of Instagram in 2012 and WhatsApp in 2014, with the US government alleging Meta made the purchases while operating an illegal monopoly in the US social networking market.

It is seeking to force the company to divest from these platforms, but the final outcome could take years after appeals.

According to the Wall Street Journal, Trump has yet to decide whether the administration will settle with the company, which would be a highly unusual decision at this stage of the proceedings.

Asked recently about his agency's commitment to the case, Trump-appointed FTC chair Andrew Ferguson said his teams were "gearing up" for the trial.

"This trial has been five years in the making, was started by President Trump in 2020 and we have the resources ready to go," he added in comments to Bloomberg TV last month.

arp/jhb

trade

Trump's trade math baffles economists

Following Trump's trade philosophy, the formula takes a country's trade deficit with the US as evidence of unfairness.

Trade economists were scratching their heads on Thursday at the formula used by the White House to measure trade imbalances and inflict punishment on all its global trading partners.
Following Trump's trade philosophy, the formula takes a country's trade deficit with the US as evidence of unfairness.

Trade economists were scratching their heads on Thursday at the formula used by the White House to measure trade imbalances and inflict punishment on all its global trading partners.

Handed a chart in the White House Rose Garden, US President Donald Trump presented the rationale for how his administration would impose reciprocal tariffs on partners ranging from major powers like China and Europe to the smallest nations.

The figures presented bear little resemblance to actual tariff levels, however.

"This is to economics what creationism is to biology, astrology is to astronomy," former Treasury Secretary Larry Summers posted on X.

While Trump's chart claims China imposes a 67 percent tariff on American products, World Trade Organization data shows China's average tariff in 2024 was just 4.9 percent.

Similar discrepancies exist for the European Union (39 percent versus 1.7 percent) and India (52 percent versus 6.2 percent).

Administration officials explained they incorporated factors beyond tariffs, including environmental standards and "currency manipulation and trade barriers."

The US trade representative published a formula with Greek letters to provide some academic credibility to the calculations -- and one that actually did not include tariff levels as a factor.

Following Trump's trade philosophy, the formula takes a country's trade deficit with the US as evidence of unfairness.

Officials then divided this deficit by the value of goods imported from that country to determine what they call "the tariff rate necessary" to balance the bilateral deficits.

Two other variables were included -- price elasticity of import demand and elasticity of import prices -- but were set in such a way that they cancelled each other out.

Trump said the administration then halved the resulting figure because "we're nice," while imposing a flat 10 percent tax on countries with which the US maintains a trade surplus.

"There's so much wrong with this approach that it's hard to know where to start," Nobel laureate Paul Krugman, a trade economist and frequent Trump critic, wrote on his blog.

Trump's focus on trade deficits reflects his view that they represent American job losses to foreign production -- a zero-sum standpoint that contradicts post-World War II economic principles.

To most economists, Trump's obsession with deficits dismisses the intricacies of the US economy, the world’s biggest, where a company like Apple manufactures 90 percent of its products abroad, but delivers huge wealth domestically.

arp/sla

tariff

'Everyone worried' by Trump tariffs in France's champagne region

BY PIERRE BEAUVILLAIN AND CATHERINE DAUDENHAN

The wider wine and spirits sector also hopes negotiations could lead to the additional tariff being removed.

With the United States the largest export market for champagne, producers of France's leading sparkling wine had little to celebrate on Thursday about facing an additional 20 percent tariff, although they held out hope for negotiations.
The wider wine and spirits sector also hopes negotiations could lead to the additional tariff being removed.

With the United States the largest export market for champagne, producers of France's leading sparkling wine had little to celebrate on Thursday about facing an additional 20 percent tariff, although they held out hope for negotiations.

"We're all worried about the decisions made by the American president," said David Chatillon, copresident of the Comite Champagne that is the trade association for the industry.

Trump spared almost no nation on Wednesday, hitting friends and foes alike and reserving some of the harshest tariffs for major trade partners, including the European Union and China.

EU products will face an additional 20 percent tariff from next week.

Some chose to look at the decision as a glass half full as Trump had threatened last month to slap EU wine and alcohol with 200-percent tariffs, and singled out champagne.

"So with that, we've gone from 200 percent to 20 percent, and no specific sectors," said Vitalie Taittinger, who heads up her family's namesake champagne house.

Trump's use of the word of reciprocal in describing the measures "can lead one to think that there's hope and room for negotiation," she told AFP.

The champagne house, which ages its wines in cellars adapted from chalk pits dating from the 4th century, exports some 600,000 bottles annually to the United States, its second-largest market.

Taittinger said she hopes the EU and United States can avoid public posturing and a political overreaction and to engage in measured negotiations to find a resolution.

'Additional burden'

Maxime Toubart, the other copresident of the Comite Champagne said "the entire industry is mobilised against this tax" which "puts in danger our presence on the American market" as well the economic viability of the sector and the Champagne region.

The trade group said champagne is "a key element of the French economy" with nearly six billion euros ($6.7 billion) in annual sales.

Nearly 30 million bottles of champagne worth 810 million euros were exported to the United States last year

"With these 20-percent tariffs we'll have a drop in volumes, but that doesn't mean that the (US) market is finished for us, which could have been the case with 200-percent tariffs," said Christine Sevillano, head of the Champagne independent vintners trade association.

But the additional US levies are "an additional burden to all of those that we already have," said Sevillano, pointing to climate change and regulatory directives.

"The United States is after all a very important market which had been rising in terms of volume and value recently," she added.

'Won't give up'

Sevillano, who exploits nearly eight hectares (20 acres) in the Marne river valley, said small independent vintners are at a disadvantage compared to large champagne houses, as developing export markets is costly and time consuming.

"Were my investments just money for nothing? Will my new partners work with me? I don't know."

But Sevillano said she "won't give up because it's a lot of money, after all".

She expressed hope that politicians on both sides of the Atlantic would opt to deescalate the situation and find a solution.

The wider wine and spirits sector also hopes negotiations could lead to the additional tariff being removed.

In 2024, the EU shipped eight billion euros in alcoholic beverages to the United States, its top export market. Wine accounted for five billion of those exports.

cor-vid-etb-kau/rl/rmb

tariff

UK avoids worst US tariffs post-Brexit, but no celebrations

BY ALEXANDRA BACON

Although he called the 10 percent levy "a disappointment," it is significantly lower than the 20 percent levy on the EU and the 34 percent levy on China.

More than four years after the UK's withdrawal from the European Union became effective, Britain has escaped harsher US tariffs, facing only half of the 20 percent imposed on its EU neighbours.
Although he called the 10 percent levy "a disappointment," it is significantly lower than the 20 percent levy on the EU and the 34 percent levy on China.

More than four years after the UK's withdrawal from the European Union became effective, Britain has escaped harsher US tariffs, facing only half of the 20 percent imposed on its EU neighbours.

But London's cautious response to the 10 percent tariffs imposed Wednesday by US President Donald Trump highlights its delicate juggling act between its two largest trading partners.

The Labour government is keen to avoid jeopardising negotiations over a post-Brexit trade deal with Washington.

"I recognise the announcements by the president last night put the UK in a relatively better position than, for instance, the EU," Business Secretary Jonathan Reynolds told Sky News.

Although he called the 10 percent levy "a disappointment," it is significantly lower than the 20 percent levy on the EU and the 34 percent levy on China.

Prime Minister Keir Starmer told business chiefs on Thursday that "clearly there would be an economic impact" from the tariffs, but avoided stronger comments made by other major economic powers that hinted at retaliation.

With Britain receiving the lowest band of tariffs, the opposition party, the Conservatives, has touted it as a post-Brexit win.

Andrew Griffith, the Conservatives business and trade spokesman, said the US's approach on tariffs was a "vindication" for Brexit.

The Labour government, which won power in July, had a more muted response.

"I'm happy that we, in the UK, can set our own specific trade policy in our own interests ... but, look, this is much bigger than the UK's relationship to the European Union," Reynolds told Times Radio on Thursday.

For Britain, "it's a 'win' in that we would be worse off if we were still in the EU," Jonathan Portes, professor of economics at King's College London, told AFP.

"But of course the main point is that this is lose-lose for everybody," he added, as tariffs threaten to stifle economic growth.

Washington or Brussels?

Starmer visited Washington at the end of February and came away hopeful a long-awaited accord could be reached.

Trump himself held out the prospect of a "great" deal that could avoid tariffs on Britain, hailing Starmer as a tough negotiator.

Portes explained that the lower tariff rate has "nothing to do with any negotiations or special treatment," and instead, relates to the fact the UK does not have a goods trade surplus with the US.

The US accounted for 15 percent of the UK's goods exports and 10 percent of its goods imports in 2023, according to the latest annual data from the Office for National Statistics.

The British government has reiterated that it does not need to choose between the Washington and Brussels.

But some economists have warned that concessions to the United States could spook partners in the EU, which remains by far the UK's largest trading partner.

"Right now it would be better to pursue a deeper EU trade relationship to make up for the economic hit," from American customs duties, said David Henig, director of the UK Trade Policy Project.

The government is consulting with exporters on the impact of possible retaliatory action.

"If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused and any measures flowing from that will be lifted," Reynolds said.

Trade body Make UK said the tariffs were "devastating for UK manufacturing."

"It will destroy decades of integrated supply chains connecting the UK with US through other trading partners such as the EU, Canada and Mexico," said chief executive Stephen Phipson.

ajb/jkb/rl

US

Lesotho, Africa's 'kingdom in the sky' jolted by Trump

The economy is heavily reliant on textile exports bound for the United States through the African Growth and Opportunity Act (AGOA) trade deal which provides duty-free access to the US market for some African products.

US President Donald Trump in March ridiculed Lesotho as a place "nobody has ever heard of" and then this week hit the tiny African kingdom with the highest of his reciprocal trade tariffs for any single nation.
The economy is heavily reliant on textile exports bound for the United States through the African Growth and Opportunity Act (AGOA) trade deal which provides duty-free access to the US market for some African products.

US President Donald Trump in March ridiculed Lesotho as a place "nobody has ever heard of" and then this week hit the tiny African kingdom with the highest of his reciprocal trade tariffs for any single nation.

Here are some things to know about the country sometimes called the Switzerland of Africa because of its mountainous landscape.

'Kingdom in the sky'

Completely surrounded by South Africa, Lesotho is the largest of only three enclaved states in the world, far bigger than San Marino and the Vatican City, both of which are within Italy.

At 30,355 square kilometres (11,720 square miles), it is about the same size as Belgium.

Its population is roughly 2.3 million, compared to Belgium's nearly 12 million.

Lesotho is known for the beauty of its mountainous terrain and styles itself the "Kingdom in the Sky".

More than 80 percent of the country sits 1,800 metres (5,900 feet) above sea level and it is home to southern Africa's only ski resort.

The highest peak is Mount Thabana Ntlenyana, with an altitude of at 3,482 metres.

A constitutional monarchy, it is ruled by 61-year-old King Letsie III, who has no formal power. The government is led by a prime minister.

- Textile economy -

With a annual gross domestic product of just over $2 billion, Lesotho is largely dependent on South Africa -- it biggest trading partner -- from which it imports most of its food, selling water in return.

The economy is heavily reliant on textile exports bound for the United States through the African Growth and Opportunity Act (AGOA) trade deal which provides duty-free access to the US market for some African products.

Its traditional Basotho blankets are a national symbol and renowned for their vibrant patterns and woollen warmth. They are often loaded with meaning, from celebrating life and nationality, to fertility and royalty, peace, love and courage.

Lesotho ranks among the world's poorest countries despite huge mineral reserves.

British mine company Gem Diamonds said in 2018 it had discovered a 910-carat stone in one of its several Lesotho diamond mines.

The country also pioneered the growing of cannabis for medical use in Africa.

Unemployment has remained stubbornly high, hitting nearly 25 percent in 2023, according to the World Bank.

- Royal row -

A charity co-founded by Prince Harry in Lesotho to help people living with HIV ran into turbulence this month after a bitter boardroom row led King Charles III's younger son to step down as patron.

Its Zimbabwe-born chairperson, Sophie Chandauka, publicly accused the prince of "bullying" and being involved in a "cover up", accusations the former royal has dismissed as lies.

Harry founded the charity in 2006 with Prince Seeiso of Lesotho, before it expanded to Botswana.

The name, Sentebale, is a tribute to his mother, Princess Diana, who died in a Paris car crash in 1997 when he was just 12.

HIV pandemic

At least one in four adults in Lesotho is infected with HIV, in one of the highest rates in the world.

More than 230,000 people were receiving anti-retroviral treatment in 2021, according to the World Health Organization.

In 2020, the country achieved the UN's "90-90-90" goal of 90 percent of people with the virus being diagnosed, on treatment and achieving viral suppression.

The country also has the second-highest incidence of TB in the world, estimated at 724 cases per 100,000 people.

bur-ho/br/cw

tariff

How Trump's 'liberation day' tariffs will impact China

BY LUNA LIN AND OLIVER HOTHAM

Trade between it and the United States, the world's two largest economies, is vast.

US President Donald Trump has slapped punishing new tariffs on imports of Chinese goods, deepening a trade war between the world's two largest economies.
Trade between it and the United States, the world's two largest economies, is vast.

US President Donald Trump has slapped punishing new tariffs on imports of Chinese goods, deepening a trade war between the world's two largest economies.

Beijing has vowed countermeasures in response and warned the new tariffs will cripple global supply chains -- and Washington's own interests.

AFP looks at how so-called "liberation day" tariffs -- which bring levies on Chinese goods to 54 percent -- will hit China:

- Why is China so vulnerable? -

China's export-driven economy is particularly sensitive to vicissitudes in international trade.

Trade between it and the United States, the world's two largest economies, is vast.

According to Beijing's customs data, sales of Chinese goods to the United States last year totalled more than $500 billion -- 16.4 percent of the country's exports.

US duties also threaten to harm China's fragile economic recovery as it struggles with a long-running debt crisis in the property sector and persistently low consumption -- a downturn Beijing had sought to slow with broad fiscal stimulus last year.

But an intensified trade war will likely mean China cannot peg its hopes for strong economic growth this year on its exports, which reached record highs in 2024.

"The US tariffs on Chinese imports announced so far this year could fully negate the lift from the fiscal stimulus measures announced so far," Frederic Neumann, Chief Asia Economist at HSBC, told AFP.

And while he said the impact on export competition may be slightly mitigated by the fact that all countries are hit by the levies, he stressed "the drag on Chinese growth is nevertheless significant".

What impact will the new tariffs have?

The new tariffs slap 10 percent levies on imports from around the world.

But China has long drawn Trump's ire with a trade surplus with the United States that reached $295.4 billion last year, according to the US Commerce Department's Bureau of Economic Analysis.

The latest salvo adds 34 percent to a 20 percent rate imposed last month, bringing the total additional tariffs on imports from the Asian economic powerhouse imposed by the Trump administration to 54 percent.

The tariffs come into effect in stages -- a ten percentage point bump on Thursday, followed by the full levy on April 9.

China is also under sector-specific tariffs on steel, aluminium and car imports.

Analysts expect the new levies to take a significant chunk out of the country's GDP, which Beijing's leadership hope will grow five percent this year.

Julian Evans-Pritchard, Head of China Economics at Capital Economics, said in a note he said he expected the economic hit to range from 0.5 percent to one percent of GDP.

Likely to be hit hardest are China's top exports to the United States -- the country is the dominant supplier of goods from electronics and electrical machinery to textiles and clothing, according to the Peterson Institute of International Economics.

But analysts also warn that because of the crucial role Chinese goods play in supplying US firms, the tariffs may also have major knock-on effects.

"US imports from China are dominated by capital goods and industrial materials instead of consumer goods," Gene Ma, Head of China Research at the Institute of International Finance, told AFP.

"The tariff will hurt US manufacturers as well as consumers."

"This trade war not only has a destructive impact on China but also on the global trade system," Chen Wenling, Chief Economist at the China Center for International Economic Exchanges in Beijing, said.

How might Beijing respond?

Beijing has yet to specify what exactly its "countermeasures" will involve.

But the retaliation could see Beijing hike pre-existing tariffs imposed in response to previous measures.

"China's countermeasures should be reasonable, beneficial and measured," Mei Xinyu, an economist at the state-affiliated Chinese Academy of International Trade and Economic Cooperation in Beijing, told AFP.

"They need to be strong and precise, while also avoiding turning the countermeasures into a decoupling of China and the United States," Mei added.

China last month slapped tariffs of 15 percent in imports of coal and liquefied natural gas from the United States. Crude oil, agricultural machinery, big-engined vehicles and pickup trucks also face 10 percent duties.

Analysts say those moves are designed to hit Trump's support base -- those in America's rural heartlands that voted him into office last year.

Beijing has called for dialogue to resolve the dispute, but any deal will take time.

"There are still chances for the two parties to resume talks in the following months," Betty Wang at Oxford Economics told AFP.

"But historical experience suggests that tariffs are typically quick to rise and slow to fall."

bur-oho/je/pbt/mlm

Global Edition

Trump tariffs hammer global stocks, dollar and oil

"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Stock markets and the dollar tumbled Thursday after President Donald Trump's latest worldwide tariff salvo fanned a trade war that many fear will spark recession and ramp up inflation.
"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Stock markets and the dollar tumbled Thursday after President Donald Trump's latest worldwide tariff salvo fanned a trade war that many fear will spark recession and ramp up inflation.

The dollar slumped by as much as 2.6 percent versus the euro, its biggest intraday plunge in a decade, and suffered sharp losses also against the yen and British pound.

On stock markets, Wall Street's tech-heavy Nasdaq Composite was down more than five percent in midday trading.

"The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump's trade policy," said City Index and FOREX.com analyst Fawad Razaqzada.

Shares in apparel companies, which rely on cheap labour in factories abroad, fell sharply with Nike sinking more than 11 percent and Gap tanking more than 20 percent.

Across the globe shares in major sectors including auto, luxury and banking, also took big hits.

Shares in Jeep-maker Stellantis fell 7.5 percent after it said it would shutter a Canadian factory for two weeks as 25 percent car tariffs came into force.

Tokyo's Nikkei briefly collapsed more than four percent. In Europe, both the Paris and Frankfurt stock exchanges finished the day with losses of more than three percent.

Oil prices plummeted around seven percent to under $70 per barrel on concerns an economic downturn would hit demand.

Gold, a safe haven asset in times of uncertainty, hit a new peak of $3,167.84 an ounce.

Yields on government bonds fell as investors fled risky assets and piled into safe-haven treasuries.

Renewed rate cuts?

The panic came after the US president unveiled a blitz of harsher-than-expected levies aimed at countries he said had been "ripping off" the United States for years.

The measures included a 34 percent tariff on world number two economy China, 20 percent on the European Union and 24 percent on Japan.

A number of others will face specifically tailored tariff levels, and for the rest, Trump said he would impose a "baseline" tariff of 10 percent, including on Britain.

"Markets, unsurprisingly have reacted badly," noted Richard Carter, head of fixed interest research at wealth manager Quilter.

"(US) Treasury yields have fallen sharply, as investors take flight and look for safe haven assets.

"This would suggest the Federal Reserve will need to put additional rate cuts on the table to look to prevent recession being triggered, but should it face inflation rising too, it is in somewhat of a bind," Carter added.

As world markets tumbled Trump acknowledged the shock brought by his tariffs onslaught, but said the US economy would emerge "far stronger".

White House Press Secretary Karoline Leavitt appeared to rule out the possibility of Trump pulling back any of the tariffs before they are implemented over the coming weekend.

"The president made it clear yesterday this is not a negotiation," she said on CNN.

Investors are bracing for retaliatory measures, but governments also left the door open for talks.

China vowed "countermeasures" and urged Washington to cancel the tariffs, while calling for dialogue.

European Union chief Ursula von der Leyen said the bloc was "preparing for further countermeasures" but she emphasised it was "not too late to address concerns through negotiations".

Key figures around 1530 GMT

New York - Dow: DOWN 3.4 percent at 40,796.96 points

New York - S&P 500: DOWN 4.1 percent at 5,440.33

New York - Nasdaq Composite: DOWN 5.2 percent at 16,679.94

Paris - CAC 40: DOWN 3.3 percent at 7,598.98 (close)

Frankfurt - DAX: DOWN 3.0 percent at 21,717.39 (close)

London - FTSE 100: DOWN 1.6 percent at 8,474.74 (close)

Tokyo - Nikkei 225: DOWN 2.8 percent at 34,735.93 (close)

Hong Kong - Hang Seng Index: DOWN 1.5 percent at 22,849.81 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,342.01 (close)

Euro/dollar: UP at $1.1066 from $1.0814 on Wednesday

Pound/dollar: UP at $1.3127 from $1.2985

Dollar/yen: DOWN at 145.89 yen from 149.39 yen

Euro/pound: UP at 84.30 pence from 83.33 pence

West Texas Intermediate: DOWN 7.5 percent at $66.30 per barrel

Brent North Sea Crude: DOWN 6.9 percent at $69.79 per barrel

burs-rl/gv

tariff

BY BEIYI SEOWvar date = new Date("2025-04-04T01:27:12Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Frightening'

Hard to relocate

tariff

BY SEBASTIAN SMITHvar date = new Date("2025-04-04T01:23:28Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Trust Donald Trump'

Global economic 'sumo wrestler'

tariff

BY JULIE BOURDINvar date = new Date("2025-04-04T00:25:37Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

End of AGOA?

tariff

var date = new Date("2025-04-04T00:21:05Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

tariffs

BY DANIEL AVISvar date = new Date("2025-04-03T22:58:44Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

Grocery store costs

Electronics and cars

Shoes, clothes

merger

var date = new Date("2025-04-03T22:45:04Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

trade

BY JEAN ARCEvar date = new Date("2025-04-03T22:38:48Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

The bad

The unknown

Global Edition

var date = new Date("2025-04-03T22:30:29Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

Renewed rate cuts?

Key figures around 2200 GMT

trade

var date = new Date("2025-04-03T21:52:06Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

tariff

var date = new Date("2025-04-03T20:24:03Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

"The world is reorganising"

tariff

BY ANNE-MARIE PROVOSTvar date = new Date("2025-04-03T19:43:41Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Everybody's uncertain'

Fed

var date = new Date("2025-04-03T19:33:28Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

tariff

var date = new Date("2025-04-03T19:07:30Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Major achievement'

Meta

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trade

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tariff

BY PIERRE BEAUVILLAIN AND CATHERINE DAUDENHANvar date = new Date("2025-04-03T17:55:25Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Additional burden'

'Won't give up'

tariff

BY ALEXANDRA BACONvar date = new Date("2025-04-03T17:07:49Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

Washington or Brussels?

US

var date = new Date("2025-04-03T16:53:55Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

'Kingdom in the sky'

HIV pandemic

tariff

BY LUNA LIN AND OLIVER HOTHAMvar date = new Date("2025-04-03T16:29:25Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

What impact will the new tariffs have?

How might Beijing respond?

Global Edition

var date = new Date("2025-04-03T15:55:53Z") var userTimezoneOffset = Math.abs(date.getTimezoneOffset() * 60000); var dd = new Date(date.getTime() - userTimezoneOffset) + " "; document.write(dd.split('(', 1)[0]);

Renewed rate cuts?

Key figures around 1530 GMT

BY BEIYI SEOW

BY SEBASTIAN SMITH

BY JULIE BOURDIN

BY DANIEL AVIS

BY JEAN ARCE

BY ANNE-MARIE PROVOST

BY PIERRE BEAUVILLAIN AND CATHERINE DAUDENHAN

BY ALEXANDRA BACON

BY LUNA LIN AND OLIVER HOTHAM