Trump hits Canada and Mexico with 25% tariffs as he confirms reciprocal tariff regime from April 2nd. Thailand braces for economic impact, while US manufacturing faces a slowdown. Trade tensions escalate as global markets react to Trump’s trade war.
President Trump on Monday confirmed that his worldwide reciprocal tariff regime will take effect from April 2nd. This is not good news for Thailand. However, Thai ministers have pledged to adjust the kingdom’s own tariff structure to make the most of the latest Trumpian challenge. In the meantime, the US President pushed ahead on Tuesday with 25% tariffs on Canada and Mexico. It came as there were signs that Trump’s policies are beginning to affect growth in the US economy at home.
Donald Trump has confirmed that April 2nd will mark the start of his new reciprocal tariff regime. Certainly, this will include Thailand, which has maintained a significant trade deficit with the United States.
Nonetheless, the move is expected to add pressure on global markets. At length, recent data suggests Trump’s tariff policies are beginning to impact the US economy.
In short, Thai economic planners will be assessing just how determined and decisive this Trump administration will be.
Indicators for Thailand are not good. Rising concern about the trade war threat to the kingdom’s economy
However, so far, the indications for Thailand are not good. Indeed it is more evident that the trade war threat to the kingdom’s economy is growing more serious.
Trump has already declared that all imports from Mexico and Canada will be subject to a 25% tariff starting Tuesday. Indeed, on Monday he dismissed any chance of last-minute negotiations.
“The tariffs, you know, they’re all set. They go into effect tomorrow,” Trump stated at the White House. His announcement sent US markets into turmoil. The S&P 500 fell 1.8%, marking its worst session of the year.
The Nasdaq Composite, dominated by tech stocks, dropped 2.6%. Individual companies took a hit, with Nvidia plunging 8.7% and ConocoPhillips dropping 6.6%.
Canada retaliates with tariffs on US imports, and US economic signs show strain from Trump’s policies
Canada immediately retaliated, imposing a 25% tariff on $30 billion of US imports. A further $125 billion in US goods could face levies in the coming weeks.
Canadian Prime Minister Justin Trudeau condemned the US tariffs. The outgoing premier stated: “Our tariffs will remain in place until the US trade action is withdrawn.” At the same time, the economic impact of Trump’s trade policies at home is becoming evident.
The Federal Reserve Bank of Atlanta’s latest estimate predicts a 2.8% fall in US GDP for the first quarter. Certainly, this is a steeper decline than previously forecasted. Uncertainty over tariffs is weighing on confidence among manufacturers.
Undeniably, it is contributing to a drop in new orders and employment. Washington has long pressured Mexico and Canada to tighten border security and crack down on the opioid fentanyl trade.
Last month, Trump signed an executive order applying additional tariffs of 25% on all imports from the two countries. Significantly, he excluded Canadian oil and energy products. In effect, they will face a reduced 10% levy.
Trump’s tariffs set for April 2, with Thailand monitoring and preparing for economic disruptions
Initially, the tariffs were set to take effect in March. Nonetheless, they were postponed following diplomatic talks with Trudeau and Mexican President Claudia Sheinbaum.
At this time, they are going into effect. After that, with the April 2 deadline for a reciprocal worldwide tariff regime confirmed, analysts fear further instability in global trade relations.
Meanwhile, Thailand is closely monitoring the situation. Commerce Minister Pichai Naripthaphan and Finance Minister Pichai Chunhavajira have indicated that Thailand will adjust its tariff policies in response.
In short, Thailand will trim its sails toward whichever way the wind is blowing. The kingdom’s economy, already affected by global trade tensions, could see further disruptions. Trump’s trade war is opening up on many fronts.
US announces new tariffs on Chinese imports, with China warning of countermeasures to safeguard its rights
On Monday, a White House official confirmed that the president had signed an executive order increasing tariffs on Chinese imports from 10% to 20%. When asked if more hikes could follow, Trump said: “I can’t say, it depends on what they do with their currency, it depends on what they do in terms of… some kind of economic retaliation.”
Beijing responded with a firm warning. China’s commerce ministry said it would take “countermeasures to firmly safeguard its own rights and interests.”
It accused the US of undermining global trade and harming economic cooperation between the two countries. Trump’s tariff policies coincide with significant cuts to federal government spending.
Tens of thousands of high-paid government workers are being laid off as part of his broader economic strategy. The move is expected to have widespread economic consequences. In particular, in sectors reliant on government contracts and the NGO service sector.
US manufacturing sector shows signs of slowing, raising concerns over economic growth under Trump’s policies
US manufacturers are already feeling the effects of Trump’s aggressive trade stance. The ISM Manufacturing Index dropped to 50.3 in February, nearing contraction territory. New orders fell sharply from 55.1 to 48.6.
In short, it raises concerns about slowing growth. Economists warn that inflationary pressures could rise as a result of the tariffs. Despite market turmoil, Trump remains committed to his trade agenda.
He argues that tariffs will incentivize businesses to relocate manufacturing to the US. “So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs,” he said.
One bright spot in the US economy is Taiwan-based semiconductor giant TSMC’s plan to invest $100 billion in advanced manufacturing in the United States. This move is seen as a strategic win for Washington amid global supply chain disruptions.
Indeed, in recent weeks there has been a string of such announcements, including a $500 billion investment from Apple.
Apple’s global shift amid trade tensions, with concerns over economic risks lingering across sectors
Undoubtedly, the latter will come at the expense of Apple’s operations in both China and Ireland. However, concerns over the economy persist. The blue-chip S&P 500 suffered its worst session of the year following Trump’s announcement.
The sharp drop in GDP projections underscores growing unease over the impact of trade policies. Jack Kleinhenz, chief economist at the National Retail Federation, acknowledged the strength of recent economic data but warned of risks ahead.
“Although recent economic data remains strong, we are concerned about the downside risks,” he said. He cited tariffs, immigration restrictions, and deregulation as key challenges facing businesses.
Thailand waits on new Trump retaliatory trade tariffs to be launched within hours from the White House
Bank of Thailand cuts loan rates 25 basis points as the kingdom battens down the hatches for a tough year
Trump’s firm stance on tariffs is reshaping global trade. With April 2 approaching, markets, businesses, and foreign governments remain on edge.
The coming weeks will reveal how determined and decisive this Trump administration will be, as the trade war escalates on multiple fronts. Bangkok and Thai economic heads will be feeling the pressure as the kingdom braces for another headwind.
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Further reading:
Trump hits Canada and Mexico with 25% tariffs as he confirms reciprocal tariff regime from April 2nd
Economic growth in 2025 faces growing downside risk as growth for 2024 now confirmed at only 2.5%
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Economy sees sharp setback with lower private spending, investment and foreign tourism income
Trump’s trifecta triumph means Thailand will be more on edge as he prepares to take power in January
