 "US President Donald Trump holds a \"Foreign Trade Barriers\" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, DC. Reuters")
It’s here… Trump’s ‘Liberation Day’ is here.
After weeks of anticipation, standing in the White House’s Rose Garden, US President Donald Trump reset American trade policy as he unveiled sweeping new tariffs on trading partners, calling it a “declaration of economic independence”.
Explaining his tariff policy, Trump said, “For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” stressing that trade abuse by allies was often more intense than that committed by rivals.
“This is one of the most important days, in my opinion, in American history. It’s our declaration of economic independence,” he added. “Jobs and factories will come roaring back into our country, and you see it happening already. We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers, and ultimately, more production at home will mean stronger competition and lower prices for consumers.”
Catch live updates from Trump’s tariff announcement here
But while Trump has touted his tariffs as economic independence, economists worry that the levies could further hurt a weakening economy, send the stock market plummeting and even lead to a recession.
As countries brace for the impact of these tariffs, here are the big, big takeaways from his announcement.
Tariffs are here and they start at 10 per cent
After months of teasing, Trump has pitched his reciprocal tariff policy, which marks a fundamental shift in US economic and foreign policy.
The US president’s plan is to impose a universal 10 per cent tariff on all imports from countries and higher tariffs on dozens of others. “We will establish a minimum baseline tariff of 10 per cent,” said Trump, adding that “worst offenders” would be hit by higher tariffs.
As per his plan, more than 60 countries will see tariffs higher than 10 per cent. Trump announced that the baseline 10 per cent tariff will go into effect on Saturday (April 5) while the higher tariffs will take effect at 12:01 am on Wednesday, April 9.
Trump added that the new tariffs won’t add on to tariffs previously announced on steel, aluminium and cars. Additionally, US neighbours — Canada and Mexico — have been exempted from Trump’s ‘Liberation Day’ tariffs. Trump had earlier imposed 25 per cent tariffs on imports from both countries, with a lower rate on Canadian energy, and they will continue to face these duties.
The White House also stated later that Cuba, Belarus, North Korea, and Russia are not subjected to Trump’s reciprocal tariffs as they are facing sanctions, which “preclude any meaningful trade”.
As vowed earlier, Trump said he was being “kind” and that his tariffs wouldn’t match the ones foreign countries impose on the United States. “We are being very kind,” the president said. “We will charge them approximately half of what they are and have been charging us.”
For instance, Trump has levied a 20 per cent duty on the European Union while the EU has a 39 per cent tariff on US goods. Similarly, China , which was already been slapped with a 20 per cent tariff for its role in fentanyl trade, will be levied an additional 34 per cent — half of the 67 per cent tariff it imposes on the US — bringing its new rate to 54 per cent.
A ’26 per cent discounted reciprocal tariff’ on India
US President Trump has announced a 26 per cent “discounted reciprocal tariff” on India — half of the 52 per cent India levies on US goods. “India, very, very tough. Very, very tough. The prime minister just left. He’s a great friend of mine, but I said, ‘You’re a friend of mine, but you’re not treating us right.’ They charge us 52 per cent. You have to understand, we charge them almost nothing, for years and years and decades, and it was only seven years ago, when I came in, we started with China and we took in hundreds of billions of dollars from China in tariffs,” Trump said on his decision with regards to India.
However, it’s important to note that Trump’s tariffs on India are lower than some other Asian nations — the US president has levied 34 per cent on China, 46 per cent on Vietnam, 36 per cent on Thailand, 32 per cent on Indonesia and 32 per cent on Taiwan.
But Trump appeared to be “kind” to other Asian nations as well; the US president has announced a 24 per cent duty on Japan, 25 per cent on South Korea and 24 per cent on Malaysia.
Shortly after Trump’s announcement, India’s apex exporters’ body, FIEO, said that the reciprocal tariffs would undoubtedly affect domestic players. Ajay Sahai, Director General and CEO of FIEO, however, noted that India was better placed than other Asian nations.
“We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band. We are much better placed compared to our key competitors such as Vietnam, China, Indonesia, Myanmar, etc. We will definitely be affected by the tariffs, but we are much better placed than many others,” Sahai told PTI.
US hurts friends and foes
Trump’s ‘Liberation Day’ tariffs are expected to spark a trade war as other countries have vowed to respond.
Australia, which has been hit by a 10 per cent tariff, condemned the move, calling it “totally unwarranted.” Prime Minister Anthony Albanese said, “These tariffs are not unexpected, but let me be clear, they are totally unwarranted. President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10 per cent.
“This is not the act of a friend. Today’s decision will add to uncertainty in the global economy – and it will push up costs for American households,” he said.
Albanese has ruled out slapping any retaliatory tariffs on the United States, saying it is US consumers who will “pay the biggest price.” “We will not join a race to the bottom that leads to higher prices and slower growth. We will stand up for Australia. We will continue to make the strongest case for these unjustified tariffs to be removed from our exporters,” he said.
Italian Prime Minister Giorgia Meloni also called out Trump’s 20 per cent tariff on the EU as “wrong”. She said the EU tariffs would “not suit either party”, but that she would work towards a deal with the US to “prevent a trade war”.
China has also reacted to Trump’s tariffs. An opinion piece in Xinhua said Washington’s “rampage” amounted to “self-defeating bullying” and an “oversimplistic tit-for-tat game”.
Trump’s tariffs stun markets
Unsurprisingly, markets across the world reacted to the news. US stocks plunged in after-hours trading as investors tried to take in Trump’s sweeping tariffs. Dow futures fell more than 900 points, or 2.19 per cent. S&P 500 futures sank 3.38 per cent. Futures tied to the Nasdaq 100 dropped 4.28 per cent.
Japan’s Nikkei 225 index also tumbled at least four per cent shortly after opening on Thursday following US President Donald Trump’s announcement of sweeping global tariffs. Similarly, Australian markets dropped — the ASX 200 fell 142 points, or 1.79 per cent, led by tech stocks, banks and the property sector.
Meanwhile, gold hit a record high above $3,160 an ounce.
An economic downturn on the horizon
While Trump and his team celebrate the ‘Liberation Day’ tariffs, economics fear a downturn. Ken Roggoff, the former chief economist at the International Monetary Fund, told BBC, “He just dropped a nuclear bomb on the global trading system.”
He added that the chances of the US falling into recession had risen to 50 per cent on the back of Trump’s announcement.
And Roggoff isn’t alone in his fears. Others have also expressed alarm at the scale of Trump’s tariffs, saying they’re even larger than expected and warning that an economic downturn could result. “Those are really big tariffs, and if fully implemented, I think they’ll drive the economy into a ditch,” Mark Zandi, chief economist at Moody’s, told USA TODAY.
Kimberly Clausing, non-resident senior fellow at the Peterson Institute for International Economics, speaking to CNN described the tariff announcement as “very wrongheaded and much worse than I expected.”
“I thought it would be bad, but not this degree of self-harm. It’s just astounding that anyone would think this is a good idea,” Clausing, a former Biden official, told CNN. “I’ll be stunned if we make it through this without a recession or a complete reversal by the president.”
With inputs from agencies