Global e-commerce looms as an early casualty in US President Donald Trump’s freshly waged trade war which has sparked uncertainty and chaos in global markets.
This morning, Australia’s S&P/ASX200 index plunged a massive 156 points (-1.83%) as local markets opened for the first time after the tariffs came into force.
President Trump imposed 25 percent Tariffs on Canada and Mexico, and a 10 percent tariff on China. These tariffs against the US’s biggest three trading partners took effect on Sunday AEDT.
Today the president is warning Americans to hunker down for a rough ride, saying they may experience “pain” from the tariff measures with increased prices.
Already the impacted countries are hitting back with Canadian Prime Minister Justin Trudeau issuing 25 percent tariffs on selected US imports such as clothes, shoes, fruit and vegetables, and alcohol.
Mexico and China have both announced they will introduce retaliatory tariffs but they have not issued details yet.
Americans are having to deal with Canadian tariffs on goods worth US$170 billion.
The president nevertheless is doubling down, saying “this is the golden age of America” on his social media platform, Truth Social.
E-commerce is being hit with Bloomberg today reporting that the US government plans to end an exemption to tariffs on packages worth less than $800.This could massively hit companies such as Amazon and eBay with incoming packages of goods from across the world.
China e-retailers importing to the US loom as big losers with what are called de minimis changes. Alibaba, Temu and Shein are big importers with about US$48 billion worth of shipments in nine months in 2024, Bloomberg says. Some retailers have made preparations for such a change with Temu deciding to consolidate shipments to the US to lessen delays.
It was unclear how the changes would apply to older existing trade levies, it says.
The Australian Stock market fell heavily when it opened on the implementation of the tariffs, spooked by the uncertain global picture and trading turmoil. There is the direct issue of how the tariffs will impact China, Australia’s major trading partner, and put pressure on the Australian economy.
The Australian dollar has already tumbled below 62 US cents. Australian traders are expected to take cover in stocks and other financial instruments less impacted by the changes.
Justin Trudeau’s counter measures have not met with unanimous support within his country. The co-founder of trading platform Shopify, Tobi Lutke, accused Mr Trudeau of not doing enough in the first place to prevent the tariff s by implementing initially what President Trump was demanding. reported The New York Post.
Mr Lutke posted on X that “Canada had not held its side of the bargain”. “These are things that every Canadian wants its government to do, too. “These are not crazy demands, even if they came from an unpopular source. These tariffs are going to be devastating to so many people’s lives and small businesses.
“Leadership is about doing what’s right, not what is popular. And hitting back will not lead to anything good. America will shrug it off. Canada will decline.”
Shopify is Canada’s biggest tech company and is valued at US$150 billion.
President Trump too has faced friendly fire with the Murdoch owned Wall Street Journal issuing a stinging editorial against the tariffs on Canada and Mexico. “This reminds us of the old Bernard Lewis joke that it’s risky to be America’s enemy, but it can be fatal to be its friend,” says the editorial.
