Trump Imposes Broad Tariffs, Igniting Global Trade Tensions

Washington-President Trump’s announcement of a 10% minimum tariff on most US imports, with significantly higher duties on numerous countries, ignited a global trade war. The sweeping tariffs, unexpectedly targeting long-standing allies, threaten to inflate prices and stifle global economic growth, reversing decades of trade liberalization.

Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine.

U.S. Treasury chief Scott Bessent urged other countries to not retaliate.

“Let’s see where this goes, because if you retaliate, that’s how we get escalation,” Bessent told CNN. “Doing anything rash would be unwise,” he added.

Bessent was asked how he expected stock markets to react to the tariffs to which he replied by saying: “I don’t know.”

Stocks slumped after the announcement. Japan’s Nikkei hit an eight-month low in early trading on Thursday, while U.S. and European stock futures dropped sharply following weeks of volatile trading driven by uncertainty over the escalating trade war.

U.S. stocks have erased nearly $5 trillion of value since mid-February.

Chinese imports will be hit with a 34% tariff, on top of the 20% Trump previously imposed, bringing the total new levy to 54%. Close U.S. allies were not spared, including the European Union, which faces a 20% tariff, and Japan, which is targeted for a 24% rate. The base rates go into effect on April 5 and the higher reciprocal rates on April 9.

The effective U.S. import tax rate has shot to 22% under Trump from just 2.5% in 2024, according to the head of U.S. research at Fitch Ratings.

“That rate was last seen around 1910,” Olu Sonola said in a statement. “This is a game changer, not only for the U.S. economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”

The “reciprocal” tariffs, Trump said, were a response to duties and other non-tariff barriers put on U.S. goods. He argued that the new levies will boost manufacturing jobs at home.

“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said at an event in the White House Rose Garden.

Outside economists have warned that tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average U.S. family by thousands of dollars.

Canada and Mexico, the two largest U.S. trading partners, already face 25% tariffs on many goods and will not face additional levies from Wednesday’s announcement.

Even some fellow Republicans have expressed concern about Trump’s aggressive trade policy.

Within hours of Wednesday’s announcement, the Senate voted 51-48 to approve legislation that would terminate Trump’s Canadian tariffs, with a handful of Republicans breaking with the president. Passage in the Republican-controlled U.S. House of Representatives, however, was seen as unlikely.

Trump’s top economist, Stephen Miran, told Fox Business on Wednesday the tariffs would work out well for the U.S. in the long run, even if they cause some initial disruption.

“Are there going to be short-term bumps as a result? Absolutely,” Miran, the chairman of Trump’s Council of Economic Advisors, told the network’s “Kudlow” program.

ENDING ‘DE MINIMIS’ 

The reciprocal tariffs do not apply to certain goods, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals that are not available in the United States,” according to a White House fact sheet.

Following his remarks, Trump also signed an order to close a trade loophole used to ship low-value packages – those valued at $800 or less – duty-free from China, known as “de minimis.” The order covers goods from China and Hong Kong and will take effect on May 2, according to the White House, which said the move was intended to curb the flow of fentanyl into the U.S.

Chinese chemical makers are the top suppliers of raw materials purchased by Mexico’s cartels to produce the deadly drug, U.S. anti-narcotics officials say. A Reuters investigation last year showed how traffickers often route these chemicals through the United States by exploiting the de minimis rule. China has repeatedly denied culpability.

Trump is also planning other tariffs targeting semiconductors, pharmaceuticals, and potentially critical minerals, the official said.

Trump’s barrage of penalties has rattled financial markets and businesses that have relied on trading arrangements that have been in place since the middle of last century.

Earlier in the day, the administration said a separate set of tariffs on auto imports that Trump announced last week will take effect starting on Thursday.

Trump previously imposed 25% duties on steel and aluminum and extended them to nearly $150 billion worth of downstream products.

Tariff concerns have already slowed manufacturing activity across the globe, while also spurring sales of autos and other imported products as consumers rush to make purchases before prices rise.

European leaders reacted with dismay, saying a trade war would hurt consumers and benefit neither side.

“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favor of other global players,” Italy’s prime minister, Giorgia Meloni, said.

U.S. Representative Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, said he would introduce legislation to end the tariffs. Such a bill has little chance of passing the Republican-controlled Congress, however.

“Trump just hit Americans with the largest regressive tax hike in modern history – massive tariffs on all imports. His reckless policies are not only crashing markets, they will disproportionately hurt working families,” Meeks said.

Earlier,

Trump has imposed 29 per cent reciprocal tariff on Pakistan, besides tariff on over 180 countries and territories, saying that Islamabad charges 58 per cent tariff on goods imported from the United States.

President Donald Trump has unveiled plans for sweeping new import taxes on all goods entering the US, in a watershed moment for global trade. As per new US trade policy, the United States will impose 26 per cent tariff on India, 34 per cent on China, 20 per cent on European Union, 10 per cent tariff on Saudi Arabia, Qatar and Afghanistan.

Donald Trump said his country would impose 37 per cent tariff on Bangladesh, 24 per cent on Japan, 17 per cent on Israel and 10 per cent on the United Kingdom, adding that 25 per cent additional tax would be imposed on the import of vehicles.

In charts posted on social media, the White House shows the effective tariff rates they claim other countries impose on American goods, including by “currency manipulation and trade barriers.”

An adjacent column shows the new tariff rates the US will impose on each country or territory, including the European Union. The reciprocal rates are not necessarily the only US tariffs these countries will face.

In addition to the sweeping country-by-country tariffs announced, Trump also imposed a 10% baseline tariff that effectively ensures a tariff on any country that is not among the more than 180 singled out.

“All articles imported into the customs territory of the United States shall be, consistent with law, subject to an additional ad valorem rate of duty of 10%,” unless otherwise noted, the executive order signed this afternoon reads.

Trump also reserves the right to raise this baseline rate “should US manufacturing capacity and output continue to worsen.”

Pharmaceutical products are among the goods that will not be subject to the reciprocal tariffs announced today, according to a White House fact sheet.

But Trump has not ruled out his plans to impose pharmaceutical-specific tariffs some time soon.

Other goods not subject to the reciprocal tariffs include copper, semiconductors, lumber, bullion, energy and certain minerals that are not available in the U.S., the fact sheet said. It also includes products already subject to Trump’s recently announced tariffs, including steel, aluminum, autos and auto parts.