Declaring a national emergency, the US president said the US had for more than five decades been "looted, pillaged, raped and plundered by nations near and far, both friend and foe alike".
The plan sets a baseline tariff on all imports of at least 10%, with Trump claiming that this will create a hard reset on the country’s industry, eventually leading to a stronger economy and lower prices for US consumers. Items from countries that the White House described as the "worst offenders", including the European Union and China would face higher rates for what Trump said was payback for unfair trade policies.
Trump's move breaks with decades of American policy embracing free trade, and analysts said it was likely to lead to higher prices in the US and slower growth in the US and around the world.
The 10% tariffs start on April 05, with the higher duties beginning April 09.
The White House affirmed the latest changes would not change anything for Mexico and Canada, two of America's closest trading partners. Other allies will also face tariffs, including 10% for the UK and 20% for the European Union. And tariffs on goods from China will jump a further 34%, adding to an existing 20% levy, while it will be 24% for Japan, and 26% on India. [Note: Malaysia's tariff rate is 24%].
Some of the highest rates will be levied on smaller countries, with goods from the southern African nation of Lesotho facing 50%, while Vietnam and Cambodia will be hit with 46% and 49% respectively. The latter two have both seen a rush of investment in recent years, as firms shifted supply chains away from China following Trump's first term.
The baseline tariffs will apply to more than 100 countries, according to a White House fact sheet, of which some 60 will face a higher "reciprocal" rate.
Gustavo Flores-Macias, professor of government and public policy at Cornell University, called it a "dramatic transformation" of the international trade order, which the US had helped to create after World War Two. "We're seeing that system unravelling", he said.
The stock market was closed for trading when Trump made his announcement. But in after-market trading shares in major American companies sank sharply. Apple, which rely heavily on China and on Taiwan, which is facing tariffs of 32%, sank more than 7%. Amazon was down more than 6%, while shares in Walmart dropped more than 4%.
P.S. It's worth pointing out that Trump's tariffs used a simplistic formula to calculate the rate for each of them. The formula’s central value is the trade deficit, the difference between imports and exports between each country and the United States, for the year 2024. Trump has said these tariffs will reduce trade imbalances and level the international playing field. But his one-size-fits-all formula is blunt: It applies the exact same (arbitrary) math to countries whether they have hefty trade barriers or wide-open markets. It considers only the size of a trade deficit, not why the deficit exists. Moreover, the Trump administration calculated the trade deficit using only goods − physical items that can be shipped − and not services, such as technology, media, banking and tourism. (E.g., A DVD counts; a Netflix subscription doesn’t).
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