Factories Around the World Brace For Trump Tariffs

  • Factories around the world, from Japan to Britain to the United States, saw activity slump in March as businesses braced for new U.S. tariffs, though some saw a bounce in the race to get goods to customers before the new measures hit.
  • U.S. President Donald Trump is set to announce a tariff proposal on what he's called "Liberation Day" on Wednesday, after implementing levies on aluminium, steel, and automobiles, along with increased tariffs on all goods from China. Trump has said no nation will be spared tariffs that policymakers fear will be the latest blow to a global economy barely recovered from the COVID pandemic and beset by concerns over political instability and wars.
  • Asia's factory activity mostly weakened in March as the impending tariffs, plus weak global demand, hurt business sentiment. Purchasing Managers' Index surveys - a closely-watched gauge of economic sentiment - showed. Japan's factory activity fell at the fastest pace in a year, while South Korea's decline in factory activity also sped up, and the Taiwanese read-out was weaker as well.
  • China was one outlier, showing activity in the world's second-largest economy picking up as factories rushed to get goods to customers before U.S. tariffs took effect. And in the United States itself, where factory activity had expanded in the first two months of the year, manufacturing shrank, with the Institute for Supply Management (ISM) manufacturing PMI slipping to 49.0 from 50.3 in February.
  • The front-loading of activity was also cited as a possible factor behind a bounce in Europe's long-suffering manufacturing industry, where output rose for the first time in two years, the PMI for the 20-country euro zone showed.
  • Germany, Europe's largest economy, saw its first production increase in nearly two years, while the downturn eased in France. But British manufacturers endured a torrid March as the tariff threat and impending tax increases contributed to a plunge in new orders and ebbing optimism. Investors remain nervous, but global stocks rose on Tuesday following Wall Street's overnight gains, while gold hit an all-time peak. Investors remain nervous, but global stocks rose on Tuesday following Wall Street's overnight gains, while gold hit an all-time peak.

(Source: Reuters)