Trump’s tariff changes: World economies reel from Trump’s tariffs punch

Global markets reeled from Donald Trump’s tariffs blitz against nearly all US trading partners as governments looked down the barrel of a seven day deadline before higher duties begin.

US President Donald Trump’s muscular approach to rewriting the free trade playbook has raised fears of inflation and other economic fallout in the world’s biggest economy.

Stock markets in Hong Kong, London and New York slumped as they digested the turmoil.

Mr Trump’s actions come as debate rages over how best to steer the US economy, with the Federal Reserve this week deciding to maintain interest rates unchanged, despite massive political pressure from the White House to cut.

Data Friday showed US job growth missing expectations for July, while unemployment ticked up to 4.2 percent from 4.1 percent.

On Wall Street, the S&P 500 dropped 1.7 percent, while the Nasdaq slumped 2.3 percent.

Mr Trump raised duties on around 70 economies, from a current 10 percent level imposed in April when he unleashed “reciprocal” tariffs citing unfair trade practices.

The new, steeper levels listed in an executive order vary by trading partner. Any goods “transshipped” through other jurisdictions to avoid US duties would be hit with an additional 40-percent tariff, the order said.

But the tariffs also have a distinctly political flavor, with Trump using levies to try and get Brazil to drop the trial of his far-right ally, former president Jair Bolsonaro.

He also warned of trade consequences for Canada after Prime Minister Mark Carney announced plans to recognise a Palestinian state at the UN General Assembly in September.

By contrast, Mr Trump gave more time to Mexico, delaying for 90 days a threat to increase its tariffs from 25 percent to 30 percent.

With questions hanging over the effectiveness of bilateral trade deals already struck - including with the European Union and Japan - the outcome of Trump’s overall plan remains uncertain.

Notably excluded from Friday’s drama was China, which is in the midst of negotiations with the United States.

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Originally published as Trump’s tariff changes: World economies reel from Trump’s tariffs punch