Analysis: Trump has long promised wide ranging tariffs against friends and foes. Today the sword of Damocles fell. US Correspondent, Logan Church, unpacks what it all means.
It seemed almost like grades were being put up on a large board in the classroom.
Who did best? Who failed? Who is getting a telling off by teacher?
A chart-wielding Donald Trump today revealed the news that the rest of the world had spent months dreading – who would be getting taxes on goods they wanted to import to America, the world’s most powerful nation and economy.
The answer was, well, everyone.
Logan Church reports on the bombshell proclamations in the US President’s "Liberation Day”. (Source: 1News)
All of America’s trading nations were today slapped with a 10% tariff on all products sent to the US – and then many others got more on top of that, for those who the US President and his team thought were being extra unfair.
New Zealand just got the 10%, perhaps lower than many in NZ were expecting, but still problematic for kiwi businesses who export to the US – as it will basically make any New Zealand product sold In America 10% more expensive for US consumers to buy.
“For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike,” said Trump, at his Make America Wealthy Again event.
Trump has already used tariffs – or the threat of tariffs – as diplomatic weapons against American’s allies and enemies, including China, Canada, Mexico and Colombia.
But today was different – this was Trump painting a thick line around America’s economy and saying to everyone that if you want to cross it, you must pay.
Al Gillespie, international relations expert and professor of law at Waikato University, and I have been speaking for some time about how Trump’s actions in the White House have been changing what all of us have considered "the norm".
“At the super-macro level, you are seeing a massive change in direction – against globalisation – that was not foreseeable 10 years ago. What just occurred may well be seen by future generations as the end of an epoch,” Gillespie told me after today’s announcement.
“Trump's belief - and this is not new - is that the American economy is large enough to fuel its own prosperity and does not need the global trading system, as it stands. His focus on the American worker – and trying to drive mechanisms that will increase the wages in traditional industries - is not mistaken. But it will thwart competition, innovation, rise prices and have knock on effects that are quite unforeseeable.”
Canada’s prime minister Mark Carney has already vowed retaliation. (Canada didn’t receive extra tariffs today but was already subject to new tariffs imposed by Trump).
“We're going to fight these tariffs with countermeasures," Carney said today. "We are going to protect our workers. And we are going build the strongest economy in the G7. In a crisis, it's important to come together and it's essential to act with purpose and with force. And that's what we will do.”
Meanwhile other nations, including New Zealand, won’t retaliate. We can’t really anyway - New Zealand has absolutely no economic leverage over America so any effort to do so would be nothing more than symbolic and painful for kiwis.
“In an ideal world, there would be a collective response from all nations against Trump,” said Gillespie. “But this is not an ideal world.”
Perhaps the most nervous about Trump’s tariffs are American businesses and consumers that rely on foreign goods.
I spoke to one such business yesterday that relies on overseas liquor and food products.
Outside a large supermarket today in Washington DC, shoppers told Reuters they were expecting to see costs go up.
"We're gonna be affected big. You see it in the market. You see the groceries are going up. The farmers are catching it. You know [Trump] came and flipped the whole system around," said 66-year-old retired firefighter Chalman Holmes.
"Avocados from Mexico is definitely a big one that I think about. I know some of our citrus too are grown internationally,” said 28-year-old Sophia Robichaux.
“That's going to have an impact on grocery budgets."
The whole world is having the same conversations as Trump turns the economic order on its head.
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