Trump’s protectionist stance on trade led to sluggish trading on Wall Street. This is especially true, as a series of tariff talks between the United States and its other major allies are intensifying fears of a trade war and could even trigger a global recession.

Tariff Talks

Trade war fears surfaced in March when Trump levied a 25% tariff on steel and aluminum imports on countries around the world. The action has prompted a retaliatory action from U.S. allies and tit-for-tat import tariffs.

The turmoil intensified in recent weeks when Trump unveiled the list of Chinese goods worth $50 billion targeted for a 25% tariff, leading to retaliation from China with duties of “the same scale and strength.” In response, the United States again threatened to impose tariffs of up to $400 billion on Chinese goods on top of the $50 billion worth goods. Tariffs on $34 billion worth of Chinese goods, the first of a potential total of $450 billion are due to take effect on Jul 6.

Additionally, the latest report from the Wall Street revealed that Trump is seeking to bar many Chinese companies from investing in U.S. technology firms and block additional technology exports to China.

The trade dispute with European Union (EU) also deepened on Jun 22 after Trump tweeted that he would impose another 25% tariff, targeting imported autos from the European Union. The response came following the EU’s threat of 25% duties on $3.2 billion worth of American goods exported to the 28-member bloc, starting Jun 22, against U.S. tariffs on European steel and aluminum.

Canada and Mexico have also threatened against the use of American steel and aluminum imports. Canada is seeking duties on steel imports from the United States and on other goods including playing cards, inflatable boats, yogurt and toilet papers. The total value of American goods subject to tariff is $12.8 billion, effective Jul 1. Mexico plans to retaliate by targeting products from congressional districts that Trump’s Republican Party is fighting to retain in the November election. It would impose levies on a wide range of U.S. goods, some steel and pipe products, lamps, berries, grapes, apples, cold cuts, pork chops and various cheese products “up to an amount comparable to the level of damage” linked to U.S. tariffs.