90 Day pause on higher tariffs for all but China

U.S. President Donald Trump has announced a 90-day pause for countries hit by higher U.S. tariffs, but a trade war with China has escalated.

In a dramatic change of policy, just hours after levies against roughly 60 of America's trading partners kicked in, Trump said he was authorizing a universal "lowered reciprocal tariff of 10%" as negotiations continued.

At the same time, he increased tariffs on goods from China to 125%, accusing Beijing of a "lack of respect" after it retaliated by saying it would impose tariffs of 84% on U.S. imports.

The reason behind Trump’s abrupt reversal had become plain after a sharp sell-off in U.S. government bond markets — usually a safe corner for investors — that the economic ramifications of the president’s strategy were potentially catastrophic and worse than his advisers had previously predicted.

Reference Sources

1. CNN- Inside Trump’s tariff retreat: How fears of a bond market catastrophe convinced Trump to hit the pause button
2. BBC-US pauses higher tariffs for most countries but hits China harder

Canada, the EU, and China hit back at U.S. tariffs with reciprocal measures

(Source: The Canadian Press)

Canada has started imposing a 25% tariff on certain vehicle imports from the U.S. in retaliation against a similar measure from its neighbor.

The tariffs will be paid by Canadians who buy some automobiles or their parts from the US. Confirming that the new taxes would apply after midnight on Wednesday, Canadian Finance Minister Francois-Philippe champagne said his country was responding to "unwarranted and unreasonable" tariffs.

The EU can apply retaliatory tariffs on nearly €21 billion of U.S. products like soybeans, motorcycles and orange juice after the bloc’s 27 countries assented to the measures on Wednesday, the European Commission announced.

Hitting back against U.S. President Donald Trump’s steel and aluminum tariffs, the European Union’s countermeasures will apply in three rounds. Measures covering €3.9 billion in trade will go into force next week, with a further €13.5 billion from mid-May and a final round of €3.5 billion following in December.

After returning to power, U.S. President Donald Trump has unleashed a raft of these taxes - which apply globally and specifically aim at some of his top trading partners, including Canada. He claims they will address unfairness in global trade.

Canada's move came hours after Beijing vowed that China would "fight to the end" over the Trump administration's tariff policy, which it characterized as an attempt to "blackmail" the world.

As of Wednesday, all products imported from China to the United States would face a duty of 104%.

These steps from some of the U.S.'s largest trading partners - two friends, one foe - exemplify the challenges ahead for the Trump administration.

Reference Sources

1. bbc - Canada hits back at US car tariffs with reciprocal measures
2. polishnews - Canada took a retaliation in the USA. She hit the cars. “We react with power”
3. latimes - Harsh trade retaliation from Canada, China show challenge ahead for Trump team
4. thestarmy - Canada's countermeasures against auto imports from U.S. to take effect on Wednesday
5. Politico - EU takes revenge on Trump’s tariffs as countries approve €20B+ retaliation
6. Politico - EU targets Trump’s red states with tariffs on US trucks, cigarettes and ice cream

Walmart scraps quarterly operating income forecast, citing Trump's tariffs

(Source: Walmart)

Walmart, the largest retailer in the world, has pulled its first-quarter operating income guidance due to uncertainty over the impact of sweeping tariffs on China, Vietnam, and other key sources of goods across the globe.

The discounter said it wants to "maintain flexibility to invest in price as tariffs are implemented." It did not provide a new range for first-quarter operating income.

It had projected an increase of 0.5% to 2.0% in adjusted operating income in the fiscal first quarter.

Walmart maintained its first-quarter sales outlook of 3% to 4% growth.

Walmart imports more than US$100B of merchandise a year to the country, analysts estimate, exposing its business to escalating tariffs that include a 104% levy on China that took effect on Wednesday.

Walmart said its short-term profit outlook has become less predictable, blaming in part efforts to keep prices low as U.S. President Donald Trump imposes heavy tariffs on major trading partners.

Walmart has admitted it will be badly hit by tariffs, but says it aims to keep prices lower than rivals and emerge from the challenging period with more customers. Due to its size, CEO Doug Mcmillon said the company remains in a position to "play offense," and that tariffs may push it to "invest in price."

Reference Sources

1. ft - Walmart warns tariffs have made profit outlook less predictable
2. quartz - Walmart is ditching its earnings guidance as tariffs fuel uncertainty
3. dailymail - Walmart stuns Wall Street by explaining how it can benefit from Trump's tariffs
4. cnbc - Walmart scraps quarterly operating income forecast, citing Trump's tariffs
5. cnnen - Walmart isnt sure how much money it will make this quarter because of tariffs

U.S. tariffs cause car import pile-up at American ports

(Souce: Bloomberg)

The impact of President Trump's 25 percent tariffs on imported vehicles, which went into effect last week, is already sending tremors through the auto industry, prompting companies to stop shipping cars to the United States, shut down factories in Canada and Mexico, and lay off workers in Michigan and other states.

Jaguar Land Rover, based in the UK, said it would temporarily stop exporting its luxury cars to the United States.

Stellantis idled factories in Canada and Mexico that make Chrysler and Jeep vehicles and laid off 900 U.S. workers who supply those factories with engines and other parts.

Audi, the luxury division of Volkswagen, also paused exports of cars to the United States from Europe, telling dealers to sell whatever they still had on their lots. U.S. and Canada auto sales could decline by 1.8 million vehicles this year and be stagnant over the next decade if the global trade war escalates, a Detroit-area automotive advisory firm forecasts.

If the current tariffs stay in place until 2035, sales of light-duty vehicles in the U.S. and Canada would be about 7 million units lower than the 24.6 million sales in a scenario with no trade conflicts and strong economic growth.

Reference Sources

1. nytimesen - Trump’s Tariffs Are Already Reducing Car Imports and Idling Factories
2. dailymail - Detroit's 'Big Three' car makers more exposed to Trump's tariffs than German and Japanese rivals
3. ft - US tariffs cause car import pile-up at American ports
4. usatoday - Import tariffs could cut US auto sales by 1.8 million in 2025, advisory firm says
5. cnbc - Auto giants extend losses as Trump’s sweeping global tariffs take effect

The CommonWealth English daily news digest is a service curated by the CommonWealth English team with the help of AI tools.

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