“Stand firm—it’s going to be a challenge,” says Trump, holding strong on tariffs.

Key Points:

1. New Tariffs Implemented: US President Donald Trump enforced sweeping tariffs on most imports, excluding goods from Mexico and Canada, invoking emergency economic powers. A 10% baseline tariff took effect, with higher rates set for April 9 affecting around 60 trading partners, including the EU, Japan, and China.
2. Economic and Political Fallout: The move risks triggering retaliatory measures, with China already announcing matching 34% tariffs on US goods, a WTO lawsuit, and restrictions on rare earth exports. The EU and other nations are considering countermeasures, including potential taxes on US tech firms.
3. Market Turmoil: Global markets plunged amid fears of slowed growth and inflation, with Wall Street experiencing a sharp decline following drops in Asia and Europe.
4. Exemptions and Future Threats: Some products—such as copper, pharmaceuticals, and semiconductors—were temporarily spared, but Trump has ordered investigations that could lead to additional tariffs. Auto tariffs (25%) have already impacted companies like Stellantis, forcing production pauses in Canada and Mexico.
5. International Reactions: Leaders from France, Britain, and Japan called for restraint, warning that a trade war would harm all parties. However, the EU signaled readiness to respond if negotiations fail.
6. Historical Parallels: Analysts compare Trump’s tariffs to the 1930 Smoot-Hawley Act, which worsened the Great Depression. Oxford Economics estimates the new measures will push US tariff rates to a historic 24% average.

President Trump’s aggressive tariff strategy aims to reshape global trade dynamics, promising long-term economic gains but triggering immediate market instability and international backlash. With retaliatory actions already unfolding, the risk of a full-scale trade war looms, potentially exacerbating global economic tensions. While exemptions provide temporary relief for some industries, further levies remain a possibility, leaving businesses and markets in a state of uncertainty. The coming weeks will be crucial in determining whether negotiations can ease tensions or if escalating tariffs will deepen economic disruptions worldwide.