Containers and cranes are seen at the Port of Keelung, on April 3.I-HWA CHENG/AFP/Getty Images
China vowed retaliation against U.S. President Donald Trump’s sweeping “Liberation Day” tariffs Thursday, as other countries across Asia desperately sought talks with Washington.
The U.S. imposed tariffs on more than 180 countries this week, in what Mr. Trump described as retaliation for alleged currency manipulation and trade barriers against U.S. goods. Asian nations were among the worst hit, with several export-dependent countries suffering a potentially devastating blow and leaving governments reeling from the worse-than-expected measures.
In particular, Mr. Trump’s new tariffs threaten to stymie growth in countries such as Vietnam and Cambodia, which had benefited from a shift in recent years away from manufacturing in China, partly owing to U.S. restrictions on Chinese exports introduced during the first Trump term. Vietnam, which was hit with a 46-per-cent, across-the-board tariff Wednesday, exported around US$142-billion worth of goods to the U.S., accounting for around 30 per cent of the country’s entire GDP.
Cambodia was hit with a 49-per-cent levy, a move that will likely speed up the authoritarian nation’s embrace of China, something U.S. officials had previously expressed concern about.
After an emergency cabinet meeting Thursday, Vietnamese Prime Minister Pham Minh Chinh ordered the establishment of a task force to address the situation. Other countries in the region said they were seeking talks with Washington to bring down the new levies.
“We have to negotiate,” said Thai Prime Minister Paetongtarn Shinawatra, after her country was hit with a 37-per-cent tariff, far more than the 11 per cent expected. “We can’t let it get to where we miss our GDP target.”
U.S. President Donald Trump's move to slap a 10 per cent tariff on most goods imported to the United States, as well as much higher levies on dozens of rivals and allies alike, has intensified a global trade war that threatens to stoke inflation and stall growth.
Reuters
The queue to speak to Mr. Trump and his officials will be long, however, and it’s unclear what manufacturing-dependent nations in Southeast Asia can offer given the U.S. President’s stated desire to bring such work back to American shores.
China adopted a far more defiant tone Thursday, with state media denouncing U.S. “bullying” and Foreign Ministry spokesperson Guo Jiakun vowing China “will take necessary measures to resolutely safeguard its legitimate interests.”
In a statement, the Chinese Commerce Ministry dismissed U.S. claims that the new measures were about “reciprocity,” adding this approach “ignores the fact that the U.S. has long reaped huge profits from international trade.”
Chinese goods now face a cumulative tariff of 54 per cent since Mr. Trump came to office, closing in on the 60-per-cent levies he repeatedly threatened on the campaign trail, though some sectors are already beyond this limit owing to pre-existing tariffs.
Speaking to top officials Thursday, acting South Korean President Han Duck-soo said “the global trade war has become a reality,” and vowed to take all measures to “overcome” this current crisis, though he suggested this would initially focus on emergency support and talks with the U.S. rather than retaliation.
Along with Japan, another close U.S. ally, South Korea was singled out by Mr. Trump in a speech Wednesday for imposing “colossal trade barriers” against U.S. companies. The two countries face new tariffs of 24 and 25 per cent respectively, even as officials in Seoul have tried to argue that a long-standing free trade pact with the U.S. means there are essentially no levies on most goods.
Japanese Trade Minister Yoji Muto said the new tariffs were “extremely regrettable,” adding Tokyo is debating potential retaliation and will “decide what is best for Japan, and most effective, in a careful but bold and speedy manner.”
Mr. Trump has often pointed to trade deficits as justification for his protectionist measures, but in a statement Thursday, Taiwan’s cabinet pushed back on this, arguing that any trade imbalance was because of policies adopted in Washington, not Taipei.
“Taiwan’s exports to and trade surplus with the U.S. have increased significantly in recent years, mainly reflecting the surge in demand from U.S. customers for semiconductors and related products, especially AI products, as well as President Trump’s national security policies such as imposing tariffs and technology controls on China during his first term,” the Executive Yuan said.
Taiwan’s booming semiconductor industry, a vital part of the global economy, was exempt from the 32-per-cent tariff announced by the U.S. this week.
Nor was having a trade surplus favouring the U.S. enough to exempt a country from Mr. Trump’s measures, with both Singapore and Australia hit with a 10-per-cent levy despite importing more American goods than they export.
Australian Prime Minister Anthony Albanese said Washington’s new measures “have no basis in logic and they go against the basis of our two nations’ partnership.”
“This is not the act of a friend,” he said. “Today’s decision will add to uncertainty in the global economy and it will push up costs for American households.”
Along with Australia proper, a White House announcement also separately listed several islands controlled by Canberra in the southern Indian Ocean – Heard Island and the McDonald Islands – despite them not having any exports to the U.S. as a result of being uninhabited and basically barren.
With reports from Alexandra Li in Beijing and Reuters
Globe economics reporter Mark Rendell says Wednesday’s tariff announcement by President Donald Trump saw Canada not hit as hard as predicted, but that the trade war has now gone global.