US trading partners baffled by Trump’s tariffs, but little appetite for trade war

The new tariffs announced Wednesday by US President Donald Trump drew puzzled yet measured reactions from key trading partners, highlighting the lack of appetite for a full-fledged trade war.

Trump presented the import taxes, which he calls “reciprocal tariffs” and range from 10 percent to 49%, in the simplest terms: the US would do to its trading partners what he said they had been doing to the US for decades.

The EU is ready to respond to the sweeping tariffs, the bloc’s chief Ursula von der Leyen warned Thursday, but urged Trump to address his concerns through dialogue.

“I deeply regret this choice,” von der Leyen said. “There seems to be no order in the disorder. No clear path through the complexity and chaos that is being created as all US trading partners are hit.”

She added that the EU was “prepared to respond.”

“We are now preparing for further countermeasures to protect our interests and our businesses if negotiations fail,” von der Leyen said.

Trump unveiled particularly stinging tariffs Wednesday on major trade partners China and the European Union on what he called “Liberation Day.”

The figure for the EU was 20% and comes after Trump had previously slapped tariffs on steel and aluminum imports as well as cars and auto parts.

The bloc has, however, pushed strongly to resolve Trump’s trade concerns through dialogue, and von der Leyen left the door open again Thursday.

“There is an alternative path. It is not too late to address concerns through negotiations,” she said.

Von der Leyen made her comments in English, French and German in a video address from Uzbekistan where she will attend the EU-Central Asia summit this week.

Von der Leyen said the new tariffs would hurt consumers around the world.

“It will be felt immediately. Millions of citizens will face higher grocery bills. Medication will cost more as well as transportation. Inflation will go up,” she warned.

There are also concerns in Europe that Trump’s higher customs duties will lead to a flood of cheap goods from other countries, especially China.

Von der Leyen said the EU would be “watching closely what indirect effects these tariffs could have” and vowed to protect the continent’s industries.

“Europe will stand at the side of those directly impacted,” she promised.

Beijing said it “firmly opposes” the new tariffs on its exports, and vowed “countermeasures to safeguard its own rights and interests.”

Trump unveiled particularly stinging tariffs of 34% on China, one of its largest trading partners. That comes on top of a 20% imposed last month.

The tariffs “do not comply with international trade rules,” China’s Commerce Ministry said.

It urged Washington to “immediately cancel” them, warning they “endanger global economic development.”

Canada’s Prime Minister Mark Carney warned the tariffs will “fundamentally change the global trading system.”

Canada was not included in Wednesday’s tariff package but already faces 25% tariffs on steel and aluminum.

“We are going to fight these tariffs with countermeasures. We are going to protect our workers,” he said.

The UK will “remain calm and committed” to sealing a trade deal with the United States which could help “mitigate” a 10 percent tariff imposed on British exports to the United States, business minister Jonathan Reynolds said.

However, “we have a range of tools at our disposal and we will not hesitate to act,” he added.

France’s President Emmanuel Macron will meet on Thursday with representatives of French sectors “impacted by the tariff measures.”

South Korea’s acting leader called for swift emergency measures to support the auto industry and other businesses potentially affected by the Trump administration’s new tariffs, pledging full government efforts to address what he described as a looming “global tariff war.”

During an emergency government meeting, Prime Minister Han Duck-soo also instructed officials to work with business groups to analyze the impact of the US tariff increases and actively engage in negotiations with Washington to “minimize damage” to South Korea’s economy, the trade ministry said.

Japanese firms are the biggest investors in the United States but Tokyo failed to secure an exemption, with Trump announcing a hefty 24% levy on Japanese imports.

“I have conveyed that the unilateral tariff measures taken by the United States are extremely regrettable, and I have again strongly urged (Washington) not to apply them to Japan,” Yoji Muto, Japan’s trade and industry minister, told reporters.

He said he spoke to US Commerce Secretary Howard Lutnick before Trump’s announcement of a new 10% baseline tariff and extra levies on selected countries — including close strategic ally Japan.

Muto said he had explained to Lutnick “how the US tariffs would adversely affect the US economy by undermining the capacity of Japanese companies to invest.”

“We had a frank discussion on how to pursue cooperation in the interest of both Japan and the United States that does not rely on tariffs,” Muto said.

Government spokesman Yoshimasa Hayashi also said that the US measures may contravene World Trade Organization (WTO) rules and the two countries’ trade treaty.

“We have serious concerns as to consistency with the WTO agreement and Japan-US trade agreement,” he told reporters.

Asked if Japan will impose retaliatory tariffs or is considering filing a suit at the WTO, Hayashi said: “We decline to disclose details of our considerations.”

Australia expressed puzzlement over the decision to slap a 29% trade tariff on its tiny Pacific territory of Norfolk Island.

The island — home to many descendants of the HMS Bounty mutineers — has a total population of a little over 2,000 people and lies 1,600 kilometers (1,000 miles) northeast of Sydney.

Its main industry is tourism.

The island’s chamber of commerce says it ranked as the world’s number 223 exporter in 2019, shipping goods worth Aus$2.7 million (US$1.7 million), led by soybean meal and sowing seeds.

Yet a global tariff list brandished by Trump showed it was being punished with a tariff nearly three times higher than the Australian mainland’s 10 percent.

“I’m not sure what Norfolk Island’s major exports are to the United States and why it’s been singled out, but it has,” Prime Minister Anthony Albanese told reporters.

“I’m not quite sure that Norfolk Island, with respect to it, is a trade competitor with the giant economy of the United States,” he added.

It “exemplifies the fact that nowhere on Earth is exempt from this.”

In any case, the prime minister could not say why the island would not face the same US tariff as the rest of the country.

“Last time I looked, Norfolk Island was a part of Australia,” he later told public radio ABC, describing it as “somewhat unexpected and a bit strange.”

Thailand’s prime minister said her country is ready to negotiate with the US to find a fair trade balance for both sides.

Paetongtarn Shinawatra said that Thailand is committed to working with the US to achieve sustainable economic growth.

She added that Thai exporters should also look for additional markets for their products to reduce their risk of relying on one main market.

Taiwan’s government said the tariffs on the island were unreasonable and it would discuss them with Washington, partly blaming US tech curbs on China in Trump’s first term for driving the trade imbalance.

Taiwan will have a 32% duty placed on its products. The US tariffs, however, do not apply to semiconductors, a major Taiwan export.

Taiwan’s cabinet said in a statement that it regretted the “unreasonable” US tariffs and would seek clarification and continue talks with Washington to ensure Taiwan’s interests were protected.

How the US has calculated the tariffs was unclear and did not reflect the complementary trade structure between the two sides, the cabinet said.

Taiwan’s exports to and trade surplus with the United States have increased because of US demand for semiconductors, and artificial intelligence-related products, as well as Trump’s first-term tariffs and controls on China, it added.

This resulted in “the shift of Taiwan’s supply chain back to Taiwan and an increase in US demand for Taiwan’s information and communications products, reflecting the huge contribution of Taiwan to the US economy and national security,” the cabinet said.