The era of cheap Chinese goods in America has ended.
Strong tariffs took effect at midnight in Washington on imports from the largest economy in Asia amid opposition from some business leaders, warnings from economists about recession, and pushback from Congress.
Tariffs of up to 104 percent on goods manufactured in China take effect at 12:01 AM Eastern Time on April 9 (12:01 PM Singapore time), although U.S. President Donald Trump predicts that China will come to the negotiating table to alleviate these tariffs.
Reciprocal tariffs - ranging from 11 percent for Cameroon to 50 percent for Lesotho - are also in effect for over 50 other countries at the same time.
The "base" rate of 10 percent applied to most countries, including Singapore, had already taken effect on April 5.
Some senior White House officials said the administration is being besieged by calls from countries seeking to reach agreements, and priority will be given to countries that have not retaliated with tariffs against the U.S.
Trump said he had a "great call" with Acting President of South Korea Han Duck-soo, who is reportedly trying to negotiate a lower tariff than the 25% applied to that country.
Trump also stated that he was waiting to hear from Chinese President Xi Jinping.
"China also wants to reach an agreement, but they don't know how to start. We are waiting for their call. It will happen!" he said in a post on Truth Social on April 8.
China showed no such trend. Instead, it stated that it would impose an 84 percent tariff on U.S. goods starting April 10, up from the previously announced 34 percent.
The previously announced retaliatory move prompted Trump to impose an additional 50% tariff on Chinese goods, raising the total tariff to 104%.
Meanwhile, EU officials have also approved a new round of retaliatory tariffs on U.S. imports. These tariffs, effective April 15, will range from 10 percent to 25 percent on about €21 billion (S$31 billion) worth of U.S. goods.
The U.S. has applied a 20 percent tariff on most exports from the EU, as well as a separate 25 percent tariff on cars and some auto parts.
No more 'economic surrender'
The White House celebrated a victory when Trump declared that his tariffs were bringing in nearly $2 billion (S$2.7 billion) every day.
"America will become very wealthy again," the president declared.
White House Press Secretary Karoline Leavitt said at a press conference hours before the retaliatory tariffs took effect that "the era of America's economic surrender has ended."
She said, "America does not need other countries as much as other countries need us."
Treasury Secretary Scott Bessent, who described China's move to raise tariffs to 34% as a "big mistake," also criticized Beijing's decision not to negotiate with Washington.
He said, "I think it's unfortunate that China really doesn't want to negotiate because they are the worst violators in the international trading system."
In 2024, the U.S. imported $462.5 billion worth of goods and services from China and exported $199.2 billion, resulting in a trade deficit of $263.3 billion.
Once each other's largest trading partners, the two countries are now firing the opening shots of a burgeoning trade war.
Speaking with The Straits Times, Dr. Alicia Garcia Herrero, chief economist for the Asia-Pacific region at the French investment bank Natixis based in Hong Kong, remarked that the additional 50 percent tariff on China is no longer really significant.
"The tariffs have become too high, and China will not be able to export to the U.S.," she said, noting that the additional tariffs "show Trump's determination." They reflect the reality that the Trump administration "wants to decouple from China at all costs," she added.
Custom-tailored trade
When Trump's team moved to reshape global trade at breakneck speed, they presented many conflicting views on the ultimate goal and whether tariffs would be applied consistently.
Trump's senior trade and manufacturing advisor, Peter Navarro, stated that this tariff is non-negotiable because the U.S. is facing a "national emergency" due to a massive trade deficit.
But Mr. Bessent argued the opposite, stating that negotiations only began after Trump created for himself a "maximum" negotiating leverage with the April 2 tariff announcement. "April, May, possibly June will be very busy," he said.
The president made his final remarks on this issue.
"Both could be right," Trump said. "There could be permanent tariffs, and there could also be negotiations."
The administration's representative, Ms. Leavitt, said Trump had requested "tailored" agreements.
She said, "This morning, he met with his trade team and instructed them to have trade agreements tailored to each country calling on this administration to sign agreements."
When asked if Trump had set a deadline for trade agreements, she declined to specify a date.
'The U.S. has become rogue'
Economists not affiliated with the administration largely find fault with the theory behind tariffs.
Dr. Marcus Noland, a senior fellow and executive vice president at the Peterson Institute for International Economics in Washington, said: "Tariffs aim to balance trade with every partner, which cannot or will not happen for macroeconomic reasons."
He said, "Tariffs would be terribly wrong if they do not have devastating consequences."
"They are not only falling behind internationally but also domestically. They will drive up the prices of clothing and footwear, affecting low-income families with young children the most."
"Overall, lower stock markets, lower growth, higher prices, and more unemployment. All of this is done with no reference to WTO (World Trade Organization) obligations or FTA (free trade agreements)," he said.
"The U.S. has become rogue," he added.
American corporations, which had thus far supported Trump, are beginning to voice opposition.
Mr. Ken Griffin, a billionaire and major donor to the Republican Party, who runs the hedge fund Citadel, called this tariff "a major policy mistake."
"I can agree with his diagnosis of the problem, but don't kill the patient to treat the disease," he stated at the 100th anniversary celebration of the University of Miami on April 7.
Mr. Griffin said, "It would be wrong to tell a middle-class or economically struggling family that 'you will have to spend an additional 20%, 30%, 40% on groceries, new toasters, new vacuum cleaners, or new cars.'"
Mr. Bill Ackman, another billionaire and CEO of the Pershing Square hedge fund, called for a 90-day pause on tariffs so Trump could take the time to "carefully and strategically address our historically unfair global trade position."
Or, he said on X on April 7, the U.S. may face a "self-inflicted economic nuclear winter."
The Consumer Technology Association calculated that tariffs of 60% to 100% on all imports from China could raise laptop and tablet prices for consumers by 46% to 68%.
Video game console prices could rise by 40% to 58%, while smartphone prices could increase by 26% to 37%.
Smartphones are the largest import item from China, with laptops in second place.
If phones are manufactured in the U.S., their prices could be three times higher.
Daniel Ives, a technology analyst, said: "An iPhone made in the U.S. will cost $3,500 (compared to $1,000) and trade from the AI (artificial intelligence) revolution will slow significantly due to the nonsensical tariffs that need to be negotiated at real levels.
"Otherwise, a dark future will come for the tech world, and U.S. consumers will pay the price for that," he said in a note.
CEO of GameStop, Ryan Cohen, a well-known Trump supporter, also spoke out. "I can't wait to get my $10,000 iPhone made in the U.S.," he wrote in a sarcastic post on X on April 4.
Video game company Nintendo stated that pre-orders for their highly anticipated Switch 2 console would be delayed due to tariffs.
Bipartisan bill
Some resistance is also rising in Congress, where Trump's party holds a majority in both chambers.
Democrats and a minority group of Republicans assert that the president has usurped Congress's function by imposing tariffs. The Constitution stipulates that Congress, not the executive branch, controls the government's purse strings.
Seven Republican senators are sponsoring a bipartisan bill to limit Trump's authority to impose tariffs.
Senator Bill Wyden, a Democrat and senior member of the Senate Finance Committee, stated: "No president has the right to tax everything that Americans buy without being accountable to Congress."
A similar bill will be introduced in the House of Representatives by Republican Don Bacon from Nebraska.
But there is also some public support for resisting China. A majority of Americans are skeptical about trading with China, according to a new report from the Pew Research Center.
Only 10 percent said trade benefits the U.S. more than China, while 46 percent held the opposite view in a survey of 3,605 adults in the U.S. conducted from March 24 to March 30. A quarter said the U.S. and China benefit equally from their trade relationship.
But perhaps Mr. Bessent had the wittiest remark when he laid the groundwork for the tariffs in March.
The Treasury Secretary told members of the New York Economic Club that "access to cheap goods is not the essence of the American Dream."
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