Trump's Tariffs Send Markets Reeling, Amid Trade War And Recession Fears

• President Donald Trump's new tariffs announced on Wednesday sent shockwaves through global markets amid worries the aggressive duties will slow growth, hit corporate earnings and stoke inflation.
• Global markets have been whiplashed since Trump took office and kept up a stream of rhetoric that threatened to unleash a global trade war. Trump's new levies crystallised those fears.
• He set a baseline of 10% across all imports and higher duties on some of the U.S.’s biggest trading partners. Taken together, the duties will erect new barriers around the world's largest consumer economy, reversing decades of trade liberalization that have shaped the global order following World War Two.
• In interviews, several investors and analysts said the rhetoric around tariffs had already caused an economic slowdown, hitting both consumer and corporate confidence. The big unknown now is how trading partners will react, they said.
• While Wednesday’s announcement provided a baseline, it is likely to be followed by months of negotiations and debilitating uncertainty. Jay Hatfield, CEO at Infrastructure Capital Advisors, spoke bluntly of the impact. "This is the worst-case scenario that the market was expecting, and that's enough to potentially send the U.S. into a recession" he said.
• Analysts expect trading partners to respond with countermeasures that could lead to dramatically higher prices for everything from bicycles to wine and how the market ultimately digests what is being done right now. Notably, China urged the United States to immediately cancel its latest tariffs and vowed countermeasures to safeguard its own interests
• "The tariffs are so comprehensive and so much larger than we expected. People were talking earlier about whether clarity would boost the market. But now you have clarity, and no one likes what they see," said Jeanette Garretty, chief economist at Robertson Stephens.

(Source: Reuters)