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3. Find your CFP Professional at letsmakeaplan .org Coming up on World Business Report The US has imposed sweeping tariffs and now the European Union and China are fighting back with their own countermeasures.
From steel to agriculture, no sector is untouched.
So, what does it mean for global trade, markets and you?
We break it all down.
Plus, we hear from our former Trump advisor, what's the real endgame in this tariff war?
But first, the news.
BBC News with Moira Alderson.
China is raising tariffs on U .S. imports to 84 per cent as a trade war deepens between the world's two biggest economies.
Earlier, the U .S. introduced a tax of more than 100 per cent on imports from China.
For its part, the European Union has announced retaliation for Donald Trump's imposition of a 25 % tax on European steel and aluminium.
There's been further upheaval on financial markets.
Shares in Europe and Asia have again fallen sharply.
In New York, the Dow Jones is steady, but the uncertainty has spread to US government debt.
Bonds are usually considered a safe asset.
In other news, Germany's incoming Chancellor has been outlining the programme of his planned coalition government.
Friedrich Mertz of the conservative Christian Democrats promised to form a strong administration which Germany and Europe could rely on.
Medics in the Gaza Strip say at least 29 people have been killed by Israeli strikes in the east of Gaza City.
Eyewitnesses say a four -storey building was destroyed by missiles.
Immigration to Israel over the last year dropped by more than a quarter compared with the previous 12 months.
By far the biggest percentage of new arrivals came from Russia.
The former Congolese president Josef Kabila says he'll return to the country very soon to help find a solution to the conflict in the east of the country.
One of the lead investigators of the deadliest rail crash in Greek history has resigned saying that he had received death threats.
57 people were killed in the accident two years ago.
Members of the Inuit community have accused a British adventurer of displaying privilege and ignorance, after she claimed to be the first woman to travel solo across Canada's largest island.
Local people said the Inuit had travelled the same route for generations.
Camilla Hempelman -Adams has since apologised.
That's the latest World News from the BBC.
news crazy day as President Trump's tariffs officially went into effect on Wednesday.
The effect around 60 countries.
But all eyes are now on China and the EU who in the last few hours have retaliated.
We'll be hearing also shortly from Trump's former economic adviser on what to make all of this on the show.
But let's get right in.
Erin Delmore is joining us, our North America business correspondent from New York to understand what's happening.
Erin, without a doubt, it's a day for business journalists like you and I.
We have to distill it for our listeners, so let's first talk about those retaliatory tariffs that have been announced by China and the EU.
What's exactly happened there?
Hi, Davina. Good to be with you on such a busy day.
Now, China announced the latest retaliatory tariffs, and this is in reaction to President Donald Trump's tariffs.
China is placing an additional 50 % levy on all goods that are imported into the U .S., so that brings the overall number to 84%, and China says that the new taxes are going to come into force on Thursday.
Now, that's after President Trump upped the tariff rate that the U .S. is posing to 104%, And this is really that back and forth escalation that we've been seeing over the last couple of days.
You know, the U .S. initially doing a 20 percent blanket tariff, actually over a month ago and then upping that another 34 percent and then adding another 50.
And right now these numbers are flying higher and faster than negotiators have a chance to really address them.
This is really the back and forth that we're seeing at the moment.
And tell us about the European Union which has just announced new retaliatory tariffs in just the past few hours.
And this is because of the metal tariffs that were imposed by the US in the first place.
And it's worth noting that this is because of the metal tariffs, because the EU moves a little bit more slowly than the US does.
The US is going by the word of President Donald Trump.
There's not a check, there's not a balance there, nothing goes through Congress, needs to be voted on.
But in the EU, all 27 member states need to come to an agreement there and that's why we see this EU going head -to -head with the steel and aluminum tariffs that went into effect a bit ago, not the latest tranche that went into effect today.
And so we are seeing now, I want to get you the specifics here, you know the tariffs are going to target some goods that really run the gamut, poultry, grains, clothing, metals, even down to dental floss and they're going to go into effect on April 15th and this is again you know the EU is facing a 20 percent tariff from the United States and and really we're seeing this ping -pong back and forth so these new tariffs that the EU has announced on the United States will affect nearly twenty billion euros worth of goods is is what we know so far but what does this actually mean for Americans and American exporters
and businesses. The important thing to remember here is that when we use the shorthand and we say the US is imposing tariffs on the UK, Europe, China, and we do get country specific.
And so we are going country by country here in the States when we set that tariff rate.
That's a tax on imports from other countries into the United States.
And so when goods arrive from, say, China into US borders, there's going to be an increased fee of 104 % of the value of that good that somebody needs to pay when the good gets to the US border.
The importer pays the fee.
That's the business that's bringing in either finished goods that then go on to sale, or unfinished goods that get made into different products that are produced here in the States.
And then businesses have a choice.
Will they let the extra costs cut into their bottom line, into their profits, or will they pass it on to consumers?
It is virtually impossible to see how some, if not all, of this cost does not get passed on to consumers.
So what we see countries doing in retaliation is putting a tariff or a tax on U .S. goods that come into the other countries' borders.
And what this does, I mean, surly listeners understand, it puts a chill on cross -border trade.
And this is really something that many past administrations, even past Republican administrations, have championed, saying that it leads each country to produce the best quality goods it can make.
It keeps everybody, you know, working toward their strengths, and then, you know, helps develop international partnership on other levels as well, certainly trade and business can impact diplomacy.
But we are seeing President Trump instead turn inwards to a protectionist stance, wanting to make more things in the U .S., wanting to make foreign competitors pay for access to the U .S. market.
And it's really putting a chill on global trade.
Well, Erin Delmo, thanks for joining us and breaking it all down for us.
I know it's a busy day for you.
We'll let you go there.
But let's take the first part, which Erin was talking about.
That is the reaction that we have seen from China, which came in first, whose retaliatory tariffs on US goods are set to take effect from Thursday.
Eighty -four percent is what Erin told us is the new retaliatory tariff that China has imposed on the US goods.
This after the US has started with 104 percent tariffs on goods coming from China.
Now Duncan Wrigley is the chief China economist at Pantheon Macroeconomics and is joining me now.
Duncan, it's a trade war officially, isn't it, between the world's two biggest economies.
What's China aiming to get out of this at this moment?
Well, China has consistently said that the door is open for talks with the US.
But the issue is in Beijing, they don't really know exactly what Trump's end game is.
in terms of raising tariffs.
So I think what China still hopes for is that in due course, the two sides can have talks and resolve issues.
I don't think anyone's realistically expecting all the tariffs to go back to where they were before, but at least the restoration of greater certainty for business and trade.
Well, what's the trade balance here?
Who stands to get hurt more?
Well, the China runs a very large trade surplus with the US, which means it exports, you know, 300 billion dollars more than the US exports to China.
So the biggest effect is on China's exports, but the pain goes both ways.
So the pain on China is the the hit to that export production in China represents, you know, hundreds of thousands by millions of jobs.
If it all goes away, or at least it have to be diverted.
But on the other side for the US it large tariff heights represent inflationary pressure.
And the US already has high inflation.
So it's mutual pain.
Well, it seems to be a game of who will blink first. And it It also seems that we've been here before in 2018 during Donald Trump's first administration where he had unrolled specific tariffs on China.
How would you compare that time to now?
Well, that time was just a minor skirmish.
If we're calling what's happening now a trade war, you know, number one, the size of the was much smaller, 20%, from the US, a limited selection of Chinese goods.
And the impact was largely absorbed by both economies over a year or two.
This time round, we're looking at, you know, 100 % tariffs from the US side.
Second big difference is first time around, it was only US and China.
This time round, it is US against the world.
So that is potentially a much larger global disruption to trade, not just trade, we're also seeing that in the financial markets, stocks and bonds.
So depending on how far this escalates, how far it goes, it could get much worse than certainly than in 2018 -2019.
Duncan Wrigley, thank you for joining us, Chief China Economist with Pantheon Macro earlier can give us some insights into what's going on in the thinking behind these tariff wars in Trump 2 .0 administration.
Judy Shelton is joining us.
A former economic advisor to President Donald Trump during his first term.
Thank you so much for being with us on World Business Report.
Judy we just heard from our expert earlier Duncan saying it seems to be the U .S. against the world this time.
Do you agree? I don't think it's the US against the world I think it's the US against an unfair trading system that has not worked to the benefit of Americans and I think the president actually has a vision for a more ethical and orderly international trading system.
You asked what his mindset is, and I can tell you, I can quote you some things he said in a speech last night.
President Trump said, I'm proud to be the president for the workers, not the outsourcers.
I'm proud to be the president who stands up for Main Street, not Wall Street, who protects the middle class, not the political class, and who defends America, not trade cheaters all over the globe.
I think that he believes that what he calls our opponents, other countries, are not afraid that his policies, America First policies, will fail.
He said last night, they're terrified that our strategy will succeed, and we're going to get bigger and stronger and better.
When he talks about his strategy, he's combining that with a supply side pro -growth agenda that involves lower taxes and deregulation also.
OK. OK. I just want to quote, because you'd quoted President Trump there, I want to chair a quote from the US Central Bank Federal Reserve Chair Jay Powell, who has said that tariffs would have a persistent impact on US inflation.
So this means that this could lead towards increased prices for American consumers.
So aren't these so -called tariffs just more taxes on Americans in a way?
You talked about the middle class.
Are they gonna hit that very middle class purchasing power as goods get more expensive?
But there's kind of a disconnect there.
If the Federal Reserve chairman is saying that Americans are going to pay for those much more expensive goods, and therefore it will have an inflationary effect.
Then why are the exporters concerned?
I think the exporters are concerned that U .S. consumers won't buy those more expensive goods.
They might turn to domestically produced goods, and that's the whole point of the program is to help re -empower our private sector.
We really have been hollowed out because of cheating, primarily from China going back for decades.
In some ways, I think the rest of the world, and particularly Europe, should appreciate that this is a battle that had to be waged.
I can recall when Nicolas Sarkozy, as the head of France, after 2008, said, we all know this is because we're being flooded with cheap imports from China, and they debase their currency, they subsidize these exports.
They are hurting a lot of countries.
And the fact that the US is willing to take on these problems in the global trading system and the global currency system, I would like to see us get closer to our European allies and in the UK.
How do you do that?
Because just in the past hours, the European Union has retaliated with more tariffs for the U .S. And are you sort of risking alienation and isolation from your closest partners?
And it's just not the European Union.
Even Canada has been upset with the tariffs that have been imposed on them.
But that is to say that they don't recognize that we have this problem and that we don't have a level trading field.
I mean, in the field of international finance and trade, it's not fair.
When we see our allies doing things like retaliating on soybeans, meat, iron, steel, textiles, tobacco and ice cream, that's what the European Union is putting their 25 % on.
When we see Canada, the head of Ontario, a province that borders our country, one of his first reactions was to say, well, then we're going to cut off electricity to one point five million American households.
This underlines for us that we are vulnerable.
We are too dependent.
It's bad enough that we we worry about getting pharmaceuticals.
During Covid, we didn't have enough face masks.
We had to import them from China.
So again, reinforcing your point only here, Judy, because again, JP Morgan CEO Jamie Dimon has also said making America great again doesn't mean that America should stand alone.
So does America with this policy risk standing alone?
In this world, which is now looking at more increased globalization, there are trade talks which are happening on the sidelines between now the European Union and Asian countries to circumvent the pressure from the US?
I think we find out who our true friends and allies are.
And it's very heartening that Japan immediately wanted to negotiate.
We have 70 countries who are asking to renegotiate, to have a more equitable, a more fair trading relationship with the United States.
It's disappointing when our allies, instead of joining us in this effort to have a more ethical and orderly international trading system, decide to retaliate.
You have to realize for Americans, this program that President Trump is trying to carry out to re -empower the private sector means more to them than this fight.
Even in financial markets it's painful, 60 % of Americans do have retirement funds connected to stock market, but our exports are just 11 % of our gross domestic product.
Imports to the U .S. are just 14 % of our gross domestic product.
So just think 89 % of our economy is not involved in exporting.
86 % does not depend on imports.
So it seems to me that we feel we have staying power and that it is worth it morally to forge this challenge to the status quo.
And it's part of our overall effort to transform But are you underestimating China in this plan there?
China has been quite clear that we will fight till the end of this trade war.
And perhaps there's 84 per cent of retaliatory tariffs is just a start.
It could get worse from here.
If it boils down to who holds out longer between the US and China, that is no contest. and all this is doing is showing us that it's a good thing we started to to pose this challenge to China because now we see a very belligerent response, but in actuality, for every dollar of US exports to China, they send $5 worth here.
They need us much more.
They need our consumer market and if they get closed out because some of their goods now seem less desirable, they're not as cheap as anymore.
I think Europe will it won't be long before Europe joins us in this fight because no economy can tolerate a government subsidized onslaught where products are sent cheaply until your own domestic capabilities have been exhausted and then you are dependent on those products.
And I think it's better that countries look to their national security alliances and their national economic sense of security and start prioritizing that and it is difficult in markets but I think people will keep the faith with the president's approach. Yudhishalton thank you for joining us former economic adviser to President Donald Trump during his first term.
You're with World Business Report from the BBC World Series.
I'm Rodney Williams, and I'm Travis Holloway.
Welcome to the Wealth Break podcast, a real conversation about finance.
Let's be honest, building wealth doesn't look the same for everyone.
I feel like sometimes being broke is a cycle and that we might have to revisit that.
And we're not stopping at success stories.
What happens when it doesn't go right?
How do you cope with it?
Because wealth isn't just about money.
It's about creating a life where you thrive and help others do the same.
Listen to the Wealth Break Podcast on the iHeartRadio app.
Asking the right questions can greatly impact your future, especially when it comes to your finances.
So if you're looking for a financial advisor you can trust, certified financial planner professionals are committed to acting in your best interest. That's why it's gotta be a CFP.
Find your CFP Professional at letsmakeaplan .org.
Now if the trade talks weren't enough, there's another twist today in the business headlines, in this entire tale of trade wars.
And that is something called the US Government bonds and how they've been reacting today.
To wrap my head around it, I want some help.
So let get Russ Mould from AJ Bell.
Hi Russ, how are you doing?
I'm sure, very well Davina, thank you.
Can you say that about this week though, very well.
Leading up to the tariffs D -Day.
It's been very volatile, but I've been in financial markets since 1991, and I've seen the Asian debt crisis, the Russian debt crisis, the technology bubble burst, the European debt crisis, the great financial crisis, COVID.
These things do come and eventually they do pass.
You are a survivor, Russ.
You're a survivor. But can you just please help us understand this?
Simplify the story for us about the US, the seal of US treasuries or government bonds that's making headlines.
What exactly are they and why is it posing a problem for the world's biggest economy?
American government bonds are treasuries, are American debt, so from the government.
So if you buy one, you are effectively lending money to the United States of America, it will pay you an interest rate, and at the end of the lifetime of the bond, which is fixed, anything from one year up to 30 or 40 or 50 years, you will get your money back.
America does not default on its debt.
So this is seen as a safe investment, interest paid money returned.
And at times of volatility and uncertainties we're seeing right now, normally investors would move towards and start buying American government bonds for that perceived safety.
So that means price goes up, yield goes down.
However, this time, the price has been going down and the yield has been going up.
So people have been selling American government bonds and everybody's trying to find out why.
Is it because of somebody's lost so much money on their shares that they've decided they have to sell American bonds just to raise some money?
Is it because of phase over inflation because of the tariffs?
Is it the Chinese selling some of their $760 billion of US government bonds to try and exercise influence in another way in this trade dispute.
So there are all sorts of different possible explanations.
But it does suggest that somebody somewhere is nervous, and if something as safe as American government bonds are showing distress, then that is a potentially bad sign for positive will over looking at is somebody deciding actually, you know what, this isn't all that bad.
After all, I don't need to say if your government bonds, I'm going to raise some money and start dipping my toe back into the stock market, because I think things are going to be fine.
So there is a positive way of looking at this as well, we'll find out which view was correct over time.
How are markets finding it today, especially the US markets, it's been a bit of a mixed reaction from the Asian and the European markets though?
Yeah, US stock market after a wild day yesterday, when it was up a lot but finished the day down, is now actually flat to slightly up today as if it's sort of trying to gauge again exactly what's going on.
and it's also looking nervously at that bond market.
But at the moment after a really sharp fall.
I'm not surprised that people are trying to think maybe it's time for a look.
Maybe there's some value to be out here.
Because over the last 10 to 15 years since the great financial crisis, buying on the dip has been a really really successful strategy.
So I'm not surprised that people will try it again.
But the longer this tit for tat trade dispute goes on between America and China and other big trading partners.
That strategy will certainly come under a pretty fierce test, I would think.
Russ, be with us because I also want to take our listeners to how people are reacting in other economies, and those economies that are export -oriented.
Let's go to Vietnam, which is facing a 46 percent tariff on its major exports, like textiles to the US.
That's got manufacturers like Pharm Quang An worried.
Pharm is the CEO of Donnie, a government factory that runs in Vietnam.
He said that he is having to keep in close contact with his customers.
about us. Customer agree that we will share 50 -50 about the cost and also you can keep continue the order.
Right now that order is almost running and we have to finish the delivery on the end of June.
Customer don't want to change, they cannot to find another supplier in a short time so everything okay right now.
But I think if everything is the high -tech Next year, or after next year, when the customer have time enough to find another supplier in another country, maybe everything will change, not the same like that.
Will you be now looking for other markets away from the US?
I'm serious looking for another market from 2025, because 40, more than 40 % of our revenue is to US.
everything suddenly changed so I feel it's not safe how we can survive so we have to find another market as soon as possible.
If the tariff continues would you stop selling your garments and goods to the US ?
No, I will try the markets Because the US market is a very good market.
So why do we stop? We always try to find another way to continue selling to US market.
So China has right now imposed 84 % levies on US goods, and US right now has 104 % tariffs on Chinese goods.
dear viewers, is this an opportunity for businesses like yours in Vietnam?
Yes, maybe! Or maybe the customer will not move to Vietnam.
They move to other countries like India and like that.
I don't want the tax very high for China and opportunity for Vietnam because it will be a fight for everybody.
Everything will be hurt.
And how's your staff reacting to this news?
The workers, the cleaners or somebody, they work.
Usually, we don't care about the macroeconomic information.
They don't care. In Vietnam, it's very different.
But a lot of people worry.
I have a meeting with all companies to tell about how the company will keep doing.
And that's the first time in my life.
What's your message to US president Donald Trump?
I never think about that but I just hope that everything people will have a good life, not stuck together.
That's Pham Quang Ang, government factory owner from Vietnam and Russ as he said the message for taking everyone together.
We heard Judy earlier, former Trump advisors saying that it is perhaps time for different kind of trade agreements.
Is it time for a new trade order globally?
It's very possible.
I mean, Vietnam may seek an individual deal with United States.
But it could be a new trade order.
Perhaps not the ones the Americans expect because the international chambers of commerce say that 13 percent of world trade involves America.
So 87 percent does not.
And maybe some frustrated trade partners, people who are frustrated with America seek do deals between themselves which is what say the UK is seeking with India right now.
So we could end up with something different, just not what the Americans expect.
And we don't know, but you're a survivor.
Russ always have been.
We shall overcome. Alright Russ Mould from AJ Bell.
Thank you so much for joining us on World Business Report.
For more, you can head to bbc .com.
We have a live page there of all these developments of the global trade tariff war.
Thank you so much for joining us.
I'm Rodney Williams. And I'm Travis Holloway.
Welcome to the Wealth Break Podcast, a real conversation about finance.
Let's be honest, building wealth doesn't look the same for everyone.
I feel like sometimes being broke is a cycle and that we might have to revisit that.
And we're not stopping at success stories.
What happens when it doesn't go right?
How do you cope with it?
Because wealth isn't just about money.
It's about creating a life where you thrive and help others do the same.
Listen to The Wealth Break Podcast on the iHeartRadio app.
