Trump tariffs everyone, with rate on China set to soar above 50%

US President Donald Trump imposed the steepest US tariffs in a century, stepping up his campaign to reshape the global economy and unnerving investors who see a trade war as a risk to US growth.

Trump announced Wednesday he will apply at least a 10-percent tariff on all exporters to the United States, with even higher duties on some 60 nations to counter large trade imbalances with the US. That includes some of the country’s biggest trading partners, such as China — which now faces a tariff of well above 50 percent on many goods — as well as the European Union, Japan and Vietnam.

“For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense,” Trump said during an event in the White House Rose Garden to unveil the so-called reciprocal tariffs. “Now it’s our turn to prosper.”

The move marks a dramatic escalation in Trump’s trade war, one that’s likely to trigger immediate retaliation from other countries and upend calculations for businesses and consumers at home.

The US president has embraced tariffs as a tool to assert US power, revive manufacturing at home and exact geopolitical concessions — counter to the decades-old consensus that lower trade barriers help to foster ties among nations and prevent conflicts. Economists say the near-term result of his measures will likely be higher US prices and slower growth — or perhaps even a recession.

In initial after-hours trading following Trump’s announcement, US stocks futures plunged more than three percent and oil slumped. Chinese stocks slid and the yuan weakened, with a key gauge of mainland shares listed in Hong Kong opening 2.6 percent lower before paring some of its loss.

Less than three months after returning to the White House, Trump has already erected trade barriers that are bigger by some measures than those imposed in the notoriously protectionist 1930s. Bloomberg Economics calculates that the effective tax rate the US now charges on more than US$3 trillion of imported goods may climb to around 23 percent — higher than any point in more than a century.

The reciprocal tariffs announced Wednesday are based on the administration’s assessment of all kinds of barriers and levies that other countries impose on US goods.

Trump said the US will only charge half of that rate, though it’s not entirely clear how it was calculated. The 10-percent baseline charge on everyone takes effect after midnight Saturday. The higher duties on targeted countries — which replace, rather than add on top of the 10-percent rate — are due to kick in on April 9, the White House said.

For now, the new measures don’t include Canada and Mexico, which are embroiled in a separate on-and-off tariff dispute with the United States. They also won’t apply to some products that are subject to separate duties tied to so-called 'Sec. 232' investigations such as autos, semiconductors and lumber.

Worse than feared

The reciprocal tariffs were “much worse than we feared,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics. There’ll be “huge implications for rerouting of trade,” she said.

The US president, who’s sought to frame his trade plans as a boost for his blue-collar voters, was joined in the Rose Garden by union members and workers from various industries — including a retired autoworker spoke on stage. Later, Trump brandished large boards during his 48-minute address to display each nation’s new rate.

China, the top US economic rival and chief target of Trump’s first-term trade war, is in his crosshairs again.

The country will get charged a 34-percent reciprocal tariff rate, according to the White House documents — stacked on top of 20-percent duties Trump already imposed this year tied to fentanyl-trafficking. That means many Chinese imports face tariffs well above 50 percent — high enough to wipe out most US-China trade by the end of this decade, based on estimates by Bloomberg Economics.

Trump also announced he would end duty-free shipping of small parcels from China under the so-called 'de minimis' exemption.

In the first official response from Beijing, the Ministry of Commerce vowed countermeasures but didn’t specify what steps China might take. It called on the US to “immediately lift its unilateral tariff measures and to properly resolve its differences with its trading partners through dialogue on an equal footing.”

Other Asian export powerhouses are also facing a hit, with reciprocal rates in the mid-20-percent range on close US allies Japan and South Korea, and almost double that for Vietnam — one of the fastest-growing US trade partners.

“Asian countries in particular look like they are in the line of fire,” said Wendy Cutler of the Asia Society Policy Institute.

The European Union, which is preparing emergency measures to shield its economy from Trump’s tariffs, is subjected to a 20-percent levy.

Trump is taking a historic gamble, with risks including a worldwide trade war marked by tit-for-tat strikes that destabilise supply chains and hurt US exporters. Speaking after the president’s announcement, his Treasury secretary urged other countries not to fight back.

“I wouldn’t try to retaliate,” Scott Bessent told Bloomberg Television. “As long as you don’t retaliate, this is the high end of the number.”

Trump indicated he would consider lowering the tariff rates if trade partners took measures that help US exports. He urged foreign leaders to “terminate your own tariffs, drop your barriers” and “don’t manipulate your currencies.”

The US president declared a national emergency tied to the size of the trade deficit, a move that allows him to use special powers to impose the tariffs. The administration is aiming to collect hundreds of billions of dollars in revenue from the new levies, helping to fill government coffers ahead of its push to cut taxes on US citizens.

Trump and his trade advisers argue the tariffs will encourage companies to shift manufacturing operations to the United States, rebuild the country’s industrial base and create jobs. In the interim, they have begged the public for patience, saying that any short-term economic pain will be worth it to reshape the economy.

That dynamic could become a political problem for Trump. Any gain from a restructured US economy could take years or longer to materialise. But the pain from tariffs could arrive quickly in the form of higher prices, many economists warn.

With consumer confidence already faltering, that could be a tough sell to US citizens weary of inflation — one of the key issues that helped propel Trump to the White House.

“This is a game changer, not only for the US economy but for the global economy,” said Olu Sonola, head of US economic research at Fitch Ratings. “Many countries will likely end up in a recession. You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time.”