A dejected investor waits to restart trading, suspended for an hour following a 5% drop in in its main index, at the Pakistan Stock Exchange (PSE), in Karachi, Pakistan, Monday, April 7, 2025.
Image: (AP Photo/Fareed Khan)
AP — The impact of US President Donald Trump’s blast of tariff hikes was reverberating across world markets Monday as America’s trading partners puzzled over whether there is room for negotiating better deals.
Several countries said they were sending trade officials to Washington to try to talk through the crisis, which has cast uncertainty over the global economic outlook, hammered markets and left U.S. allies wondering about the value of their ties with the world's largest economy.
However, Germany’s economy minister, Robert Habeck, was defiant as he arrived at a meeting of European Union trade ministers in Luxembourg, saying the premise of the wide-ranging tariffs was “nonsense” and that attempts by individual countries to win exemptions haven’t worked in the past.
It's important for the EU to stick together, he said. That “means being clear that we are in a strong position — America is in a position of weakness.”
China, which hit back Friday at Washington with 34% tariffs on US products and other retaliatory moves, accused the US of failing to play fair.
“Putting ‘America First’ over international rules is a typical act of unilateralism, protectionism and economic bullying,” Foreign Affairs spokesperson Lin Jian told reporters.
The ruling Communist Party struck a note of confidence even as markets in Hong Kong and Shanghai crumpled. “The sky won't fall,” declared The People’s Daily, the party's official mouthpiece. “Faced with the indiscriminate punches of US taxes, we know what we are doing and we have tools at our disposal.”
Leading big drops in many markets, Hong Kong’s stock benchmark, the Hang Seng, plunged 13.2%. The Shanghai Composite index, meanwhile, lost 7.3% despite reported moves by regulators to staunch the losses.
China’s Commerce Ministry said officials met with representatives of 20 American businesses including Tesla and GE Healthcare over the weekend and urged them to take “concrete actions” to address the tariffs issue.
During the meeting, Ling Ji, a vice minister of commerce, promised that China will remain open to foreign investment, according to the readout by the ministry.
South Korea’s Trade Ministry said its top negotiator, Inkyo Cheong, will visit Washington this week to express Seoul’s concerns over the 25% tariffs on Korean goods and discuss ways to mitigate the damage to South Korean businesses, which include major automakers and steel makers.
Pakistan also planned to send a delegation to Washington this month to try negotiate over the 29% tariffs on its exports to the US, officials said. The prime minister ordered Finance Minister Muhammad Aurangzeb to assess the tariff's potential impact on Pakistan's fragile economy and draw up recommendations.
The US imports around $5 billion worth of textiles and other products each year from Pakistan, which heavily relies on loans from the International Monetary Fund and other lenders.
In Southeast Asia, Malaysia’s Trade Minister Zafrul Abdul Aziz said his country will seek to forge a united response from the Association of Southeast Asian Nations to Trump's sweeping tariffs.
As chair of the 10-nation body this year, Malaysia will lead a meeting Thursday in its capital Kuala Lumpur to discuss broader implications of the trade war on regional trade and investment, Zafrul told reporters.
“We are looking at the investment flows, macroeconomic stability and ASEAN's coordinated response to this tariff issue,” Zafrul said. He denied reports Malaysia had imposed a 47% tariff on imports from the US, saying the actual average Malaysian tariff on American exports is 5.6%.
He said that he had met with the US ambassador to Malaysia to try to clarify how the US came up with its 24% tariff.
Indonesia, one of the region's biggest economies, said it would work with businesses to increase its imports of US wheat, cotton, oil and gas to help reduce its trade surplus, which was $18 billion in 2024.
Coordinating Economic Affairs Minister Airlangga Hartarto told a news conference that Indonesia will not retaliate against the new 32% tariff on Indonesian exports, but would use diplomacy to seek mutually beneficial solutions.
Some Southeast Asian neighbors, including Vietnam, Cambodia, Laos and Myanmar, face tariffs of over 40%, giving Indonesia a slight advantage, he noted.
“For Indonesia, it is also another opportunity as its market is huge in America,” Hartoto said. He said Indonesia would buy U.S.-made components for several national strategic projects, including refineries.
AP
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