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Trump announces sweeping new tariffs, upending decades of US trade policy Trump announces sweeping new tariffs, upending decades of US trade policy
(32 minutes later)
President to impose ‘reciprocal’ tariffs on largest trading partners and says new charges will bring about ‘golden age’President to impose ‘reciprocal’ tariffs on largest trading partners and says new charges will bring about ‘golden age’
Donald Trump announced sweeping tariffs on some of its largest trading partners on Wednesday, upending decades of US trade policy and threatening to unleash a global trade war on what he has dubbed “liberation day”.Donald Trump announced sweeping tariffs on some of its largest trading partners on Wednesday, upending decades of US trade policy and threatening to unleash a global trade war on what he has dubbed “liberation day”.
“This is one of the most important days, in my opinion, in American history,” Trump said, speaking on the White House lawn. For decades America had been “looted, pillaged and raped” by its trading partners, he said. “In many cases, the friend is worse than the foe.” Trump said he will impose a 10% universal tariff on all imported foreign goods in addition to “reciprocal tariffs” on a few dozen countries, charging additional duties onto countries that Trump claims have “cheated” America.
Trump said he intends to impose “reciprocal tariffs” on foreign imports, charging US trading partners the same duties imposed by the country of origin on the same goods. Among other examples, Trump criticized European bans on imported chicken, Canada’s tariffs on dairy, and Japan’s levies on rice. The 10% universal tariff will go into effect on 5 April while the reciprocal tariffs will begin on 9 April.
Trump said the US would charge half of the fees he feels trading partners unfairly impose on the US because the US people are “very kind”. “This is one of the most important days, in my opinion, in American history,” Trump said, in a long-winded speech on the White House lawn. For decades America had been “looted, pillaged and raped” by its trading partners, he said. “In many cases, the friend is worse than the foe.”
The president displayed a chart that said China charged the US 67% in “unfair” fees, and said the US would now levy a 34% fee. The EU charges 39% on imports, according to the White House, and will now be levied at 20%. Trump said the UK would be charged 10% more – equal to the Trump administration’s calculations of the UK’s fees on US imports.
The tariffs come on top of a lineup of levies that Trump has already implemented: an additional 20% tariff on all Chinese imports and a 25% tariff on all steel and aluminum imports. There is also a 10% tariff on energy imports from Canada.
Trump also announced in March a 25% tariff on all imported vehicles and, eventually, imported auto parts, which will start going into effect on Thursday.
“Reciprocal: that means they do it us and we do it to them. Very simple, can’t get any more simple than that,” he said. “This indeed will be the golden age of America,” he said.
Over the past few months, Trump has rattled global stock markets, alarmed corporate executives and economists, and triggered heated rows with the US’s largest trading partners by announcing and delaying plans to impose tariffs on foreign imports several times since taking office.Over the past few months, Trump has rattled global stock markets, alarmed corporate executives and economists, and triggered heated rows with the US’s largest trading partners by announcing and delaying plans to impose tariffs on foreign imports several times since taking office.
Trump has made clear the goals he wants to accomplish through his tariffs: bring manufacturing back to the US; respond to unfair trade policies from other countries; increase tax revenue; and incentivize crackdowns on migration and drug trafficking. But for the start of what appears to be a dramatic shift in American trade policy, one that could cause ricochets in the global economy, Trump tried to sell the tariffs with a celebratory tone.
But the implementation of his tariffs has so far have been haphazard, with multiple rollbacks and delays, and vague promises that have yet to come to fruition. The threats have soured US relations with its largest trading partners. Canada’s prime minister, Mark Carney, has called them “unjustified” and pledged to retaliate. The European Union has said it has a “strong plan” to retaliate. Nine giant US flags flanked Trump onstage in the Rose Garden, as the president spoke in front of his cabinet and a crowd of union workers wearing hard hats and fluorescent construction worker vests. Before Trump came onstage, a marine band played celebratory music to excite the crowd.
Senate Democrats are also expected to bring a resolution that would block any tariffs on Canadian products. Democratic senator Tim Kaine, who is leading the resolution, told reporters he has the support of four Republican senators: Mitch McConnell, Lisa Murkowski, Rand Paul and Susan Collins. At one point, Trump paused his speech to throw a Maga hat into the crowd. In the next breath, he announced the 10% universal baseline tariff.
If four Republicans vote with Democrats, the resolution will pass, though it will still have to go through the Republican-controlled House. In the middle of his hour-long speech, the president displayed a chart that showed the “unfair” fees that countries placed on the US, alongside the new “USA Discounted Reciprocal Tariffs”. China charged the US 67% in “unfair” fees, and said the US would now levy a 34% fee. The EU charges 39% on imports, according to the White House, and will now be levied at 20%. Trump said the UK would be charged 10% – the baseline tariff – equal to the Trump administration’s calculations of the UK’s fees on US imports.
The US stock market closed slightly up on Wednesday, ahead of Trump’s announcement, with a slight boost from news that Elon Musk may step away from his role in the White House soon to focus on his businesses. Special exceptions were made for Canada and Mexico, though the countries were previously targets of proposed broad tariffs. The White House said that goods covered by an existing trade deal with Canada and Mexico will continue to see no tariffs.
Even with the slight upswing, two of the three major stock exchanges saw their worst quarter in over two years after Monday marked the end of the first quarter. Trump said the tariff calculations also include “currency manipulation and trade barriers”, though the White House has not elaborated on how it calculated the new tariffs.
In March, consumer confidence plunged to its lowest level in over four years. Polls have shown that tariffs are unpopular with Americans, including Republicans. Only 28% of people in a poll from Marquette Law School released Wednesday said that tariffs help the economy. It appears Trump has zeroed in on the industry-specific tariffs the countries have placed on American exports. In his speech, Trump criticized policies like the EU’s ban on imported chicken, Canadian tariffs on dairy and Japan’s levies on rice.
Trump said the US would charge half of the fees he feels trading partners unfairly impose on the US because the US people are “very kind”. The countries have “placed massive tariffs on [US] products and created non-monetary tariffs to decimate our industries”, Trump said, calling them “common sense reciprocal tariffs”.
“Reciprocal: that means they do it to us and we do it to them. Very simple, can’t get any more simple than that,” he said. “This indeed will be the golden age of America,” he said.
Trump was ultimately following through with a promise he made during the election: on the campaign trail, Trump floated the idea of a 10% universal tariff on all imported goods.
The new tariffs come on top of a lineup of levies that Trump has already implemented: an additional 20% tariff on all Chinese imports and a 25% tariff on all steel and aluminum imports. There is also a 10% tariff on energy imports from Canada.
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Trump also announced in March a 25% tariff on all imported vehicles and, eventually, imported auto parts, which will start going into effect on Thursday.
“These tariffs are going to give us growth like you’ve never seen before, and it’ll be something very special to watch,” Trump said.
Trump has made clear the goals he wants to accomplish through his tariffs: bring manufacturing back to the US; respond to unfair trade policies from other countries; increase tax revenue; and incentivize crackdowns on migration and drug trafficking. But the implementation of his tariffs has so far have been haphazard, with multiple rollbacks and delays, and vague promises that have yet to come to fruition
But the threats have soured US relations with its largest trading partners. Canada’s prime minister, Mark Carney, has called them “unjustified” and pledged to retaliate. The European Union has said it has a “strong plan” to retaliate. Other retaliatory tariffs could eventually lead to higher prices that would hurt American exporters.
The US stock market closed slightly up on Wednesday, ahead of Trump’s announcement, with a slight boost from news that Elon Musk may step away from his role in the White House soon to focus on his businesses.
Even with the slight upswing, two of the three major stock exchanges saw their worst quarter in over two years after Monday marked the end of the first quarter.
In March, consumer confidence plunged to its lowest level in over four years. Polls have shown that tariffs are unpopular with Americans, including Republicans. Only 28% of people in a poll from Marquette Law School released Wednesday said that tariffs help the economy.
The uncertainty around Trump’s tariff policies have increased the likelihood of a recession, according to recent forecasts from economists at Goldman Sachs, JP Morgan and other banks.The uncertainty around Trump’s tariff policies have increased the likelihood of a recession, according to recent forecasts from economists at Goldman Sachs, JP Morgan and other banks.
Neel Kashkari, president of the Minneapolis Federal Reserve, told Bloomberg News that it is “the most dramatic shift in confidence that I can recall, except for when Covid hit”, he said. “It’s conceivable that the hit to confidence could have a bigger effect than the tariffs themselves.”
The Trump administration has tried to argue that the drop in confidence has to do with the uncertainty over trade policy, not the impacts of the tariffs themselves.
Multiple reports have suggested internal conflicts within the White House over how far and wide the tariffs should be.
Recent reporting from Politico suggests that some within the White House see the commerce secretary, Howard Lutnick, as the most aggressive about tariffs, pushing across-the-board measures. Meanwhile, the treasury secretary, Scott Bessent, and trade adviser Peter Navarro are both more averse to dramatic tariffs.
But all conflict within the White House has been largely internal, while Trump and his cabinet have spent the last few weeks trying to pitch the tariffs as good for the US economy, even as the US stock market has been sliding downward and consumer and business sentiments have plummeted.
Yet economists say the impacts of tariffs will be another uncertainty in itself, likely leading to higher prices as American businesses, which will have to pay the tariffs on imports, ultimately shifting the cost down to consumers.
“CEOs are consistently saying they want to hike prices,” Alex Jacquez, CEO of the Groundwork Collaborative, a progressive thinktank and advocacy group, told reporters on Tuesday. “What the major retailers and companies who may be affected by tariffs are already planning to do … is pass these costs along to consumers as much as they possibly can.”