Good morning. We're covering President Trump's sweeping tariff announcement — as well as Wisconsin's Supreme Court, government cuts and the Duchess of Sussex.
Trade war beginsYesterday, President Trump held up a chart at the White House Rose Garden. He laughed that not everyone in the audience could read it because the font was so small. But the content was anything but small. It detailed the tariffs he will impose on China, the European Union, Japan, India and dozens of others. That chart started a trade war against the rest of the world. The levies will total 10, 20 and even 50 percent, depending on the country. "Many people had been expecting the president to announce high tariffs today, but the numbers that he just revealed are stunning," my colleague Ana Swanson said. In Trump's telling, the tariffs are necessary to counter trade barriers that other countries have placed on America. To some extent, he has a point: Other nations do have higher tariffs than the United States does. But Trump exaggerates how big the gap is, as Ana explained. And these tariffs will not simply hurt other countries; they will also hurt the U.S. economy. Experts say the levies will result in higher prices and lower economic growth — and potentially even a recession. Today's newsletter looks at Trump's new tariffs and what may come next, with help from reporting by my colleagues. The leviesThe tariffs make little distinction between allies and adversaries. The administration claims they are based on other countries' trade barriers against the United States. In reality, the levies are based on how much more another country exports to America than imports from it, Tony Romm, Ana and Lazaro Gamio wrote. The difference between exports and imports doesn't necessarily reflect trade barriers; Americans may simply want to buy more stuff from, say, Japan than the Japanese want to buy from the United States. This chart shows the levies on some of America's biggest trading partners. (The new fees exclude Canada and Mexico, which already face separate tariffs.)
Practically speaking, the chart shows that Americans will now pay more for goods from other countries. If companies pass the tariffs on to consumers — and they almost always do — a $20 pack of beer from Germany will cost $24. A $100 bike from China will cost around $130. A $400 video game console from Japan will cost nearly $500. The levies are in addition to past tolls, such as those Trump placed on China. They exempt some goods, including some forms of energy, pharmaceuticals and things that Trump had already tariffed, particularly cars, steel and aluminum. Overall, though, they amount to a huge tax on some of America's biggest trading partners. The world reacts
Following Trump's announcement, China and Europe vowed to retaliate and the global economy showed signs of distress. China's government said it would take countermeasures to "safeguard its own rights and interests." Its options could include more tariffs, restrictions on U.S. investment in China or export controls on rare earth minerals. In Brussels, Ursula von der Leyen, the European Commission president, held a news conference just after 5 a.m. and said the bloc was ready to respond. "If you take on one of us, you take on all of us," she said. Markets in Asia and Europe dropped. The U.S. market is also expecting a rough day. One analyst told The Times that the tariffs were "shockingly high" and "a disaster." What's nextIn the coming days, other countries will probably retaliate with their own tariffs and other trade barriers. The European Union has even discussed limiting American banks' access to certain E.U. markets, Bernhard Warner reported. Those steps could be catastrophic for the U.S. economy. One question remains: Is Trump committed to a trade war? He said he would withdraw his tariffs if other countries rescinded their own trade barriers. Perhaps minor concessions would suffice; Trump suspended his penalties against Canada and Mexico after they promised to make nominal changes. A month later, he tried again but largely reversed himself after the market panicked. Perhaps that story will repeat itself. More international reactions
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The Morning: The trade war begins
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