Washington (TDI): US President Donald Trump’s decision to slap a 10% tariff on most goods imported to the United States, as well as higher duties on dozens of countries from rivals to allies, has intensified a global trade war that threatens to stoke inflation and stall growth.
The massive tariffs announced by Trump on Wednesday immediately unleashed turbulence across world markets and drew condemnation from other leaders now faced with the end of decades of trade liberalisation that have shaped the global order, according to Reuters.
As Asia awoke to the news on Thursday, Japan’s Nikkei hit an 8-month low while US and European stock futures dropped sharply following weeks of volatile trading.
US stocks have erased about $5 trillion of value since mid-February.
China, the world’s second-largest economy, faced with a fresh 34% tariff on top of the 20% Trump previously imposed, urged the US to immediately cancel its latest levies and vowed countermeasures.
US Treasury chief Scott Bessent urged other countries not to retaliate, moves that could lead to dramatically higher rates for consumers on everything from bicycles to wine.
Close US allies were not spared Trump’s ire, including the European Union (EU), which faces a 20% tariff, and Japan, which is targeted for a 24% rate.
Read More: EU to Impose $28b Counter Tariffs on US Goods
Japan said it was leaving all options to respond to the “extremely regrettable” tariffs.
The base 10% tariffs go into effect on April 5 and the higher reciprocal rates on April 9.
The effective US import tax rate has shot to 22% under Trump from just 2.5% in 2024, according to the head of US research at Fitch Ratings.
The “reciprocal” tariffs, Trump said, were a response to duties and other non-tariff barriers put on American goods.
He argued that the new duties will boost manufacturing jobs at home.
“For decades, our nation has been looted, pillaged, raped and plundered by countries near and far, both friend and foe alike,” Trump said.
Outside economists have warned that tariffs could slow the world economy, raise the risk of recession, and increase living costs for the average American family by thousands of dollars.
Canada and Mexico, the two largest US trading partners, already face 25% tariffs on many goods and will not face additional levies from Wednesday’s announcement.
The reciprocal tariffs do not apply to certain items, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals that are not available in the US”, according to a White House fact sheet.
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Following his remarks, Trump also issued 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 products from China and Hong Kong and will take effect on May 2, according to the White House, which said the decision was intended to curb the flow of fentanyl into the US.
Trump’s barrage of tariffs 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 levies 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 about $150 billion worth of downstream products.
European leaders reacted with dismay, stating a trade war would hurt consumers and benefit neither side.
“We will do everything we can to work towards a deal with the United States, with the objective of avoiding a trade war that would inevitably weaken the West in favor of other international players,” Italy’s prime minister, Giorgia Meloni, said.
