EU and China pledge countermeasures while advocating for dialogue

Global Response to US Tariffs: Calls for Dialogue Amid Rising Tensions

• Measured Reactions & Countermeasures:
  The sweeping tariffs announced by US President Donald Trump were met with cautious responses from major trading partners, reflecting a reluctance to escalate into a full-fledged trade war.

• EU & China’s Stance:

  • The EU and China vowed countermeasures while urging dialogue to resolve trade disputes before significant economic damage occurs.

  • European Commission President Ursula von der Leyen emphasized the EU’s readiness for countermeasures but highlighted the need for negotiations.

  • China strongly opposed the tariffs, warning they undermine multilateral trade agreements and pledged retaliatory actions if necessary.

• Markets & Economic Impact:

  • The announcement jolted financial markets, with US stock futures dropping 3%, oil prices declining by over $2 per barrel, and Bitcoin falling 4.4%.

  • Concerns emerged in Europe that higher US tariffs could lead to an influx of cheaper goods, particularly from China.

• Global Responses:

  • UK: Affirmed the US as its closest ally but aimed to mitigate the tariffs’ impact through trade negotiations.

  • Japan: Called the tariffs “extremely regrettable,” warning they may violate WTO rules and its bilateral trade deal with the US.

  • Italy: Criticized the 20% tariffs on EU goods, with Prime Minister Giorgia Meloni calling for a diplomatic resolution.

  • Brazil: Considered filing a WTO complaint and passed a reciprocity bill to retaliate against tariff impositions.

  • Australia & New Zealand: Objected to the tariff logic but ruled out immediate retaliation, citing concerns over inflation and economic stability.

• North American Trade Considerations:

  • Mexico & Canada: Exempt from the latest tariffs under existing trade agreements but faced separate levies on auto imports.

  • Canada: Responded to steel and aluminum tariffs with its own retaliatory measures, prompting threats of further US tariffs on European goods.

• Global Trade Implications:

  • Leaders warned of the long-term risks of escalating trade tensions.

  • Analysts cautioned that while countermeasures may be necessary, they could further strain global economic ties, with some suggesting a firm but strategic response to encourage US reconsideration.

The situation remains fluid, with diplomatic efforts continuing to prevent a full-blown trade war.