President Donald Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, with much higher duties on products from dozens of countries, kicking into high gear a global trade war that threatens to drive up inflation and stall US and worldwide economic growth.
The sweeping duties, which drew bewildered condemnation from many long-standing US allies who found themselves tagged with unexpectedly high tariff rates, promise to erect new barriers around the world’s largest consumer economy, reversing decades of trade liberalization that have shaped the global order.
Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine.
US 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 US and European stock futures dropped sharply following weeks of volatile trading driven by uncertainty over the escalating trade war.
US 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 US 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 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.
