President Trump unveiled his most expansive tariffs to date in a ceremony at the White House on Wednesday, saying he will impose a 10 percent tariff on all trading partners except Canada and Mexico, as well as double-digits tariffs on dozens of other countries.
The move was a significant escalation of Mr. Trump’s trade fight and is likely to ripple through the global economy, driving up prices for American consumers and manufacturers while inciting retaliation from other nations. While Mr. Trump had been saying for weeks that he would impose “reciprocal tariffs,” his announcement went far beyond what many economists and analysts had expected.
The tariffs will apply to more than 100 trading partners, including the European Union, China, Britain and India. Under Mr. Trump’s plan, the United States will impose a staggering new 34 percent tariff on Chinese goods, a 20 percent tariff on imports from the European Union and a 24 percent tariff on goods from Japan. India will face a 26 percent tariff on its exports to the United States.
Stock futures pointed to a sharp drop when trading resumed in Asia and the U.S., suggesting that investors were caught off guard by the scale of the tariffs. Analysts were still trying to work out how the tariff levels had been derived, and some said they were confused about the numbers. Futures on the S&P 500 tumbled more than 3 percent after Mr. Trump’s announcement.
In a slight reprieve, the new tariffs will not apply to products that Mr. Trump has already hit with separate levies, including steel and aluminum and vehicles and their parts. Energy and “other certain minerals that are not available in the United States” will also be excluded.
White House officials defended the tariffs by arguing that pernicious trading practices by other countries had led to large and persistent trade deficits for the United States, and senior administration officials said they had little appetite for haggling with individual countries over lower tariff rates, even with U.S. allies that have offered to reduce their own levies on American exports in recent days. Trump officials also issued an early warning to countries that have threatened to impose retaliatory tariffs against the United States.
Mr. Trump at one point described his approach as “kind,” explaining that the government would only be charging other countries half of the rate that they had calculated should be applied based on those countries’ trade practices. He framed his policies as a response to a national emergency, saying that tariffs were needed to boost domestic production. Others were far less downcast about what lies ahead.
“The era of increasingly free and extensive international trade, built upon a rules-based system that the U.S. was instrumental in shaping, has drawn to an abrupt end,” Eswar Prasad, a professor of trade policy at Cornell University, said.
He added, “Rather than fixing the rules that many U.S. trading partners admittedly took advantage of to their own benefit, Trump has chosen to blow up the system governing international trade.”
Here’s what else to know:
• Markets react: Wall Street shuddered as Mr. Trump announced the tariffs, with early market reaction pointing to a further slide in the stock market and a weakening dollar. Futures on the S&P 500, which allow investors to trade outside normal trading hours, fell more than 3 percent, erasing the day’s gain of 0.7 percent.
• European response: European officials are poised to respond to Mr. Trump’s tariffs with countermeasures. Although the bloc so far has concentrated on imposing higher tariffs on a wide variety of goods — whiskey, motorcycles and women’s clothing are among the products that could be affected — officials are also open to placing trade barriers on services, using a new trade weapon that would target Big Tech and Wall Street.
• Auto tariffs: New tariffs on automobiles made outside the United States will go into effect after midnight, adding to previous tariffs on steel, aluminum and other imports worth billions of dollars that Mr. Trump has imposed since returning to office in January.
• This story was originally published by The New York Times.
