Trump tariffs sow fears of trade wars, recession, and a $2,300 iPhone

Friday 04 April 2025 - 09:30

By: Zahouani Ilham

Trump tariffs sow fears of trade wars, recession, and a $2,300 iPhone

Global concern mounted after U.S. President Donald Trump unveiled sweeping tariffs, sparking fears of a global recession and sharply higher prices in the American market. Financial markets around the world plunged in response, while leaders from major economies criticized the move as a blow to decades of international trade cooperation.

On Wednesday, President Trump announced new tariffs, prompting swift backlash and raising worries that trade conflicts could escalate. Japan’s Prime Minister Shigeru Ishiba labeled the situation a “national crisis” as Tokyo’s stock market suffered one of its worst weeks in years, driven by a plunge in bank shares.

Investment firm JP Morgan increased the likelihood of a global recession to 60%, up from 40%, underscoring market anxieties. Conflicting statements emerged from Washington about the permanence of the tariffs—Trump framed them as powerful tools for negotiation, while some officials insisted they were non-negotiable.

The planned tariffs, including a flat 10% on all imports and steeper duties on certain countries, would mark the highest U.S. trade barriers in over a century. These measures could dramatically raise prices for American consumers. Analysts estimate that if companies like Apple pass on the cost, a high-end iPhone could retail for nearly $2,300.

Businesses scrambled to respond. Stellantis announced temporary layoffs and factory closures in North America, while General Motors pledged to expand domestic production. Canada’s Prime Minister Mark Carney accused the U.S. of abandoning its role as a global economic leader and introduced retaliatory measures.

China, the European Union, and other key partners, including France, Japan, South Korea, Mexico, and India, weighed their responses. French President Emmanuel Macron urged a halt on European investments in the U.S., while others hinted at countermeasures if negotiations failed. Meanwhile, Britain’s foreign minister said the U.K. was seeking a bilateral trade deal with the U.S.

Global leaders, including IMF Director Kristalina Georgieva, warned the tariffs could severely disrupt already fragile economic growth. She urged the U.S. to ease tensions and foster stability.

Despite internal disagreements within the administration, President Trump reiterated his belief that tariffs strengthen America's bargaining position. However, global financial indicators painted a grim picture: the Dow Jones dropped nearly 4%, the S&P 500 fell by 5%, and the tech-heavy Nasdaq plunged 6%—its worst day since March 2020.

Major American firms like Nike and Apple, which rely on international manufacturing, saw double-digit declines in their stock prices. In Asia, Japan’s Nikkei faced its sharpest weekly decline in five years, particularly in banking stocks. Investors, doubting the Bank of Japan’s capacity to raise rates amid the chaos, fled to government bonds, causing yields to tumble.