Former US President Donald Trump has said that there could be a few exceptions to his new 10% base tariff on most US trading partners. This comment was made while speaking to the media on his way to Florida. However, he also added that 10% would remain the minimum tariff for most countries looking to sign trade agreements with the US.
This statement has added fresh uncertainty to the global markets, which are already under pressure due to Trump’s recent sharp tariff moves. Just a few days ago, he announced higher import taxes on many countries. But these were delayed after a strong negative reaction from the stock and bond markets.
Trump has kept a high 145% tariff on Chinese goods, while the standard 10% rate is expected for other countries. These aggressive trade policies have worried global investors and raised concerns that they could slow down the global economy.
In spite of the confusion, the US stock market closed the week on a strong footing. The S&P 500 climbed 1.8% on news that the Federal Reserve may act to shore up the market, if necessary. US bond yields also made substantial movements, posting their largest one-week gain in more than 20 years.
However, there remains uncertainty. Many believe that Trump’s trade policy, intended to bring jobs back to the US and boost government revenue, risks driving major economies towards a downturn.
At the same time, the US-China trade war has intensified further. China has already imposed an increased tariff of 125% on all US imports, equal to the US move on Chinese imports. Beijing indicated that it will not increase tariffs but will take strong measures if necessary.
Trump was optimistic, though, and expressed that he feels something will work out in the trade battle and complimented Chinese President Xi Jinping on being a shrewd and strong leader.
For Indian markets, these global trade tensions may lead to heightened volatility, affect exports, and shape foreign investor flows in the short term.
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Source: Moneycontrol.
News Desk
