WASHINGTON/SINGAPORE — New taxes on goods from many countries, ordered by US President Donald Trump, have officially started. These taxes, called tariffs, are meant to make other countries pay more to sell their products in the US — especially goods from China, which now face a huge 104% tax.
These new rules are shaking up the world economy. Big companies are losing money, stock markets are falling, and many experts are now worried about another global recession — a time when economies slow down, jobs are lost, and prices go up.
Since Trump first announced the tariffs last week, the US stock market has dropped a lot — its biggest fall since the 1950s. Even usually safe investments like government bonds were affected, showing how serious the situation is.
Trump, however, says the tariffs are helping. He called them “permanent” but also said they are pushing other countries to make better trade deals with the US. “We have a lot of countries coming in that want to make deals,” he said at the White House on Tuesday.
The US is planning talks with countries like South Korea and Japan. Vietnam, another country affected by the new taxes, will also meet with US officials.
Earlier this week, hopes for new deals helped the stock market go up for a while — but it went back down by the end of the day.
Germany’s finance minister warned that the trade fight could cause their economy to shrink. JP Morgan, a major bank, says there’s now a 60% chance that the entire world might enter a recession before the year ends.
China Fights Back
In response to Trump’s higher tariffs, China also announced its own taxes. China says the US is being unfair. “The US continues to abuse tariffs to pressure China,” said Chinese official Lin Jian. “China firmly opposes this and will never accept this kind of bullying.”
China’s leaders are meeting to find ways to help their economy recover. Other countries like South Korea are also helping their businesses with tax cuts and support.
Meanwhile, India and New Zealand lowered their interest rates to help their people deal with possible price increases.
Experts warn that American shoppers might suffer the most. Because of these new taxes, prices on everyday things like shoes and wine might go up soon.
The stereo brand Bang & Olufsen already said it will raise prices next month. A recent survey also showed that nearly 75% of Americans expect prices to rise over the next six months.
Goods that were already being shipped to the US when the new rules started won’t be taxed — as long as they arrive by May 27.
Trump’s first round of tariffs started last weekend — a 10% tax on goods from many countries. The latest round began Wednesday at midnight and includes some of America’s oldest allies like the European Union. The EU plans to vote on its own response soon.
Trump says these tariffs are needed to fix trade problems and stop unfair practices. He also accused countries like Japan of lowering their currency to make their products cheaper — something Japan denies.
More tariffs might still come. Trump told other leaders that he will soon place “major” tariffs on imported medicine — which hasn’t been taxed yet.
