American President Donald Trump’s aggressive new tariffs on imports to the US have triggered swift global condemnation and threats of retaliation as world leaders brace for economic upheaval.
The sweeping measures, unveiled on Wednesday (April 2), have introduced a 10 percent baseline tariff on all imports and impose significantly higher duties on key US trading partners.
The tariffs — some of the highest imposed by the US in over a century, according to Fitch Ratings — have increased the average duty on imports to 22.5 percent, up from just 2.5 percent last year.
They target various goods, from Italian coffee and Japanese whisky to Asian-made sportswear, and have already prompted automaker Stellantis (NYSE:STLA) to temporarily lay off US workers and shutter plants in Canada and Mexico.
‘The consequences will be dire for millions of people around the globe,’ European Commission President Ursula von der Leyen said in a scathing response, reflecting rising fears of escalating trade conflicts.
China, which is now facing a 54 percent tariff on its exports to the US, has vowed immediate retaliation, while the EU, which is subject to a 20 percent duty, has hinted at targeted countermeasures.
Despite mounting criticism, Trump continues to defend the tariffs, claiming they are necessary to counter unfair trade practices and revive the American manufacturing industry. He has described the policy as ‘Liberation Day’ for the US economy, insisting it will incentivize companies to relocate production back to American soil.
‘For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike,’ Trump declared from the White House Rose Garden on Wednesday.
Administration officials argue the tariffs will create jobs and open new export markets, though they acknowledge the benefits may take time to materialize. ‘We know a lot of Americans are worried,’ US Vice President JD Vance told Fox News. ‘What I’d ask folks to appreciate here is that we are not going to fix things overnight.’
Trump himself appears unfazed by the turmoil and criticism, posting on Truth Social, his social media platform: ‘THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING.’
Global leaders scramble to respond
The tariffs have ignited geopolitical tensions, particularly among US allies. Japan and South Korea, both home to major American military bases, were hit with tariffs of 24 percent and 25 percent, respectively.
Taiwan faces a 32 percent tariff despite ongoing US military support amid Chinese pressure.
In Europe, Germany’s IW research institute estimates that the tariffs could wipe out 750 billion euros (US$833 billion) from the region’s economy. The move has compounded existing tensions between the US and NATO allies, particularly regarding defense spending and Trump’s controversial stance on Russia’s war in Ukraine.
Robert Habeck, Germany’s economy minister and vice chancellor, has suggested the formation of closer economic ties with Canada and Mexico to counterbalance US policies. ‘Opportunities for new alliances are emerging that we should use determinedly and decisively,’ he stated, as reported by Reuters.
Canadian Prime Minister Mark Carney condemned the tariffs, saying he has spoken with German Chancellor Olaf Scholz about strengthening trade ties. ‘As we face the crisis caused by President Trump’s tariffs, reliable trade partners are more important than ever,’ Carney said, adding that Canada intends to take countermeasures.
Mexico has signaled it will continue negotiating with Washington.
Notably, certain products are exempt from the new tariffs, including copper, pharmaceuticals, semiconductors, lumber, gold, energy products and specific minerals unavailable in the US.
Additionally, existing tariffs on steel, aluminum, vehicles and vehicle parts remain unaffected by the new measures. These exemptions suggest the Trump administration is strategically attempting to safeguard industries and resources critical to national interests.
EU and other nations prepare countermeasures
The EU has vowed a strategic response, with officials stating that any countermeasures will be ‘smart and targeted.’
European leaders have particularly criticized Trump’s decision to include some of the world’s poorest nations in his sweeping tariffs, including Cambodia, Bangladesh and Lesotho.
‘To see countries like Lesotho, Cambodia, and Bangladesh hit the hardest by US tariffs is absolutely deplorable,’ an EU official said, as per a report by the Guardian. ‘These are not major industrial competitors. They produce goods like coffee and bananas, which pose no threat to the US economy.’
For his part, French President Emmanuel Macron has blasted the tariffs as ‘brutal and unfounded’ and emphasized their ‘massive’ impact on the French economy and Europe as a whole.
Sweden’s prime minister, Ulf Kristersson, expressed concerns over growing protectionism, stating, ‘The rules-based order that we have operated within since World War II is now on shaky ground.’
Despite the outrage, some European leaders view the tariffs as a potential bargaining chip for negotiations.
‘Our preferred option is, of course, to negotiate a deal. We don’t want growing trade barriers. We don’t want a trade war,’ Kristersson said. ‘If this fails, the EU stands ready with countermeasures.’
A tumultuous trade landscape
The US tariffs have left the global trade landscape in turmoil, with repercussions extending far beyond immediate economic losses. Many experts see Trump’s aggressive trade stance as a gamble that could reshape global alliances and challenge the post-World War II economic order.
Should negotiations with affected nations fail, the world could see a new era of economic fragmentation, with countries seeking to decouple from US trade dependence.
Watch the video to hear experts discuss the impact of tariffs.
The EU has already signaled that it may impose restrictions on American tech companies’ ability to charge for intellectual property, potentially striking at the heart of Silicon Valley’s economic dominance.
As April 9 — the date when targeted tariffs take full effect — approaches, the world is watching to see whether Trump’s trade policy will yield the economic resurgence he promises, or plunge global markets into deeper instability.
With allies and rivals alike preparing retaliatory measures, the prospect of a full-scale trade war looms larger than ever.
US stock market takes a hit
Following Trump’s announcement, US stock indexes experienced significant declines.
By midday Wednesday (April 3), the Dow Jones Industrial Average (INDEXDJX:.DJI) had fallen over 2 percent, while the S&P 500 (INDEXSP:.INX) had dropped 3.7 percent.
The Nasdaq Composite (INDEXNASDAQ:.IXIC) was down 4.6 percent, and the US Dollar Index had slumped by 2.1 percent. The euro gained 2.4 percent, marking its most substantial daily jump since 2015.
Analysts have expressed concerns that the tariffs could lead to inflation and reduced consumer demand, potentially increasing the risk of stagflation.
Canadian markets also recoiled from the tariffs, with the S&P/TSX Composite Index (INDEXTSI:OSPTX) slipping by 840 points to 24,466, marking its largest single-day drop since June 2020.
Although Canada largely avoided these new levies due to the US-Mexico-Canada Agreement, sectors such as autos, steel and aluminum remain affected by separate tariff policies.
Additionally, oil and copper prices fell due to concerns over slowing global growth and reduced demand. Despite these challenges, the gold price steadied after a prior surge as investors sought safe-haven assets.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.