Trump's tariffs: The world economy was jolted on Thursday as United States President Donald Trump’s sweeping new tariffs on foreign imports sent shockwaves through governments, investors, and industries worldwide. The sudden move prompted threats of retaliation from several countries and urgent calls for negotiations while markets struggled to absorb the impact of the aggressive policy shift.
US financial markets endured their worst single-day decline since the COVID-19 crisis devastated the global economy five years ago. As per reports, trillions of dollars in corporate value were wiped out as virtually every sector reeled under the weight of the announcement. Retailers, banks, airlines, clothing, and technology companies were among the hardest hit, with analysts warning that rising prices from tariffs could curb consumer spending and strain business profitability.
Economists described the tariffs as far more severe than anticipated, sparking a wave of panic selling as investors scrambled to offload shares in companies expected to bear the brunt of the new economic burden. Many view the tariffs as a de facto business tax likely to disrupt supply chains and raise costs across various industries.
What IMF chief said on Trump's tariff?
Reacting to the development, International Monetary Fund (IMF) Managing Director Kristalina Georgieva expressed deep concern, noting that the US tariffs "clearly represent a significant risk to the global outlook" amid an already fragile period of sluggish economic growth. "It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty," Georgieva said in a statement. Meanwhile, the IMF and World Bank will also hold meetings later this month to discuss the world economic outlook and other issues. US tariffs will be a part of that discussion, the Associated Press (AP) reported.
Trump's new tariffs on several countries
It is to be noted here that Trump announced sweeping new reciprocal tariffs on several countries, including India. Highlighting the high tariffs imposed by India on American goods, Trump announced a "discounted reciprocal tariff" of 26 per cent on India, stressing his administration's intent to address perceived trade imbalances. Holding up a chart during the event, Trump illustrated the disparities in tariffs levied by various nations such as India, China, the United Kingdom, and the European Union. The chart displayed how these countries would now be subjected to reciprocal tariffs by the US.
US Treasury Secretary warns against Trump tariff retaliation
Following the announcement by President Trump, US Treasury Secretary Scott Bessent warned trading partners that retaliatory measures against the White House's newly imposed tariffs would only lead to further escalation. "My advice to every country right now is, do not retaliate. Sit back, take it in, let's see how it goes. Because if you retaliate, there will be escalation. If you don't retaliate, this is the high watermark," Bessent was quoted as saying by Fox News.
(With inputs from agencies)
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