Global Outcry as U.S. Tariffs Spark Fears of Trade War and Economic Downturn

Countries worldwide are pushing back against sweeping tariffs imposed by U.S. President Donald Trump, warning of a potential trade war and economic turmoil. The sharp policy shift has triggered a selloff in global financial markets, fueled fears of rising consumer prices, and drawn condemnation from key trading partners.

Announced on Wednesday, the tariffs mark one of the most significant protectionist moves in over a century, with a 10% baseline tariff on all imports and higher levies on select nations. The move could drive up prices on a wide range of products in the U.S., including electronics, apparel, and automobiles. Analysts at Rosenblatt Securities estimate that a high-end iPhone, for instance, could see its price soar to nearly $2,300 if costs are passed on to consumers.

Global Response and Economic Impact

Japanese Prime Minister Shigeru Ishiba described the situation as a "national crisis" as Tokyo’s stock market suffered its worst week in years. Meanwhile, investment bank JP Morgan raised its probability of a global recession by year-end to 60%, up from a previous estimate of 40%.

The business community is already reacting. Automaker Stellantis announced temporary layoffs for U.S. workers and the closure of plants in Canada and Mexico, while General Motors stated it would ramp up domestic production.

The policy shift has also drawn sharp criticism from world leaders. Canadian Prime Minister Mark Carney accused the U.S. of abandoning its traditional role as a leader in international economic cooperation, while French President Emmanuel Macron urged European nations to suspend investment in the U.S. China and the European Union have vowed to retaliate, with Beijing facing a 54% tariff on its exports and the EU preparing countermeasures against the 20% duty imposed on its goods.

While some nations, including Japan, South Korea, Mexico, and India, are holding off on immediate retaliation in hopes of negotiating concessions, others warn of severe consequences. IMF Managing Director Kristalina Georgieva cautioned that the tariffs pose a significant threat to the already fragile global economy.

Mixed Signals from Washington

The U.S. administration appears divided on whether the tariffs are a long-term measure or a negotiating tool. Commerce Secretary Howard Lutnick and senior trade adviser Peter Navarro stated that the policy was non-negotiable. However, Trump later contradicted them, suggesting the tariffs provide leverage in trade talks. "The tariffs give us great power to negotiate," he told reporters.

As tensions escalate, Washington’s allies and economic rivals alike brace for the impact of what could become a full-scale trade war, with global markets and consumers caught in the crossfire.

Also Read: Apple's iPhones might get 40% costlier as per President Trump's new tariff plan