The global trade war is no longer a latent threat: it is in full swing. The drastic increase in tariffs announced by U.S. President Donald Trump has triggered a chain reaction that is shaking the foundations of international trade. China, the first major economy to respond, announced tariffs of 34% on all U.S. goods, a move that will take effect on April 10. Beijing's offensive also includes export controls on rare minerals essential for medical technology and consumer electronics.

The impact has been immediate and forceful. Stock markets in Asia and Europe deepened losses following the red trail left by Wall Street the previous day, when the S&P 500 index suffered its biggest plunge since the Covid-19 pandemic in 2020, falling 4.8%. Frankfurt's DAX plunged more than 5%, Paris lost 4.2% and London retreated 3.9%. In Tokyo, the Nikkei closed down 2.8%, with Japan's own Prime Minister Shigeru Ishiba calling Trump's tariffs a "national crisis."
China's reaction was not just symbolic. Beyond tariffs, the pressure extended to key commodities. The price of copper, vital for electric vehicles, energy storage and renewables, plunged more than 5%, marking its worst intraday drop since July 2022. Oil also suffered: West Texas Intermediate futures tumbled 7.2%, while Brent fell 6.8%, amplifying fears about global energy demand.

"Sentiment is extremely fragile right now," warned Chris Beauchamp, head of market analysis at IG. "Investors are in 'take me to cash' mode, on fears that other nations will follow China's lead, and of course, that Trump will respond with more burdens."

The concern is global. Japan is trying to calm the situation through a possible direct call between Ishiba and Trump, while in Europe, the European Commission is evaluating responses that are not limited to retaliatory tariffs. Maros Sefcovic, the bloc's trade chief, said they will act in a "calm, carefully phased and unified" manner, although he warned that the EU "will not stand idly by" if a fair deal is not reached. France and Germany, for their part, have suggested that they could tax U.S. tech companies as part of the response.

Even smaller countries, such as those in the Pacific, feel caught in the storm. Island states such as Vanuatu, Fiji and Nauru were subjected to punitive tariffs by the United States, despite their modest trade surpluses. Fiji, known for exports such as bottled water and kava, now faces a 32% tariff. "The measure is quite disproportionate and unfair," said Fiji's finance minister, Biman Prasad, who added that they are seeking to better understand the reasons behind these sanctions.

Meanwhile, the Trump administration maintains a defiant tone. Trump himself dismissed the stock market plunge, assuring that stocks "are going to explode," while his Commerce Secretary Howard Lutnick called for patience: "Let Donald Trump run the global economy. He knows what he's doing," he declared on CNN.

Not everyone in Washington shares that optimism. Senate Republican leader Mitch McConnell broke ranks by calling the tariffs "bad policy," stressing that long-term prosperity requires working with allies, not against them.

The escalation between the United States and China not only threatens to weaken both powers, but could have a significant impact on global growth. According to Ngozi Okonjo-Iweala, head of the World Trade Organization (WTO), this trade war could shrink the volume of world merchandise trade by one percent this year.

China, which exported goods worth more than 500 billion dollars to the United States last year, recognizes that the tariff battle could hit hard its economic growth, estimated at 5% for this year. Analysts consulted by AFP anticipate that the U.S. offensive could cut between half a percentage point and one percentage point of China's GDP.

Although tensions remain high, there is still room for negotiation. "There are still opportunities for both sides to resume talks in the coming months," said Betty Wang of Oxford Economics. However, she cautioned that historical experience shows that "tariffs go up quickly, but come down very slowly."

The question dominating the corridors of power around the world is clear: how far will this global trade war unleashed by Trump go? For now, the answer seems to be written in red on the boards of international markets.

With information from AFP