Topline
President Donald Trump announced Wednesday the U.S. would impose “reciprocal tariffs” on its trade partners based on the total cost of protective barriers and taxes they charge the U.S.—his most sweeping tariff announcement to date.
President Donald Trump speaks during a “Make America Wealthy Again” trade announcement event in the … More
Getty ImagesKey Facts
Trump, in a highly anticipated Rose Garden address, announced the individual tariffs are a “discounted” rate based on “the combined rate of all their tariffs, non-monetary barriers and other forms of cheating.”
Trump said the rates were about half of the total charges each country imposes against the U.S., calling his approach “kind.”
Chinese products will be subject to a 34% tax, for example, goods from the European Union will be taxed at 20%, Vietnam at 46%, Japan at 24%, and imports from India at 26%, according to a chart Trump held while making the announcement—with some rates significantly higher than the across-the-board 20% tax Trump had proposed during his campaign.
Every country will have a baseline tariff of 10%, which is included in the numbers on the chart Trump used to debut the rates.
Canada and Mexico were not included in the chart Trump held and they will not be subject to the 10% baseline tax, though Trump did address whether the 25% tariff on most Canadian and Mexican imports would take effect this week, as previously planned after he delayed them for about a month.
The president also confirmed a 25% tariff on all imported autos would take effect at midnight.
How Did The Stock Market Respond?
As pf 4:45 p.m., S&P 500 futures had dropped nearly 2%, Nasdaq 100 futures were down 2.5% and Dow Jones Industrial Average futures fell nearly 1%.
When Will The Tariffs Take Effect?
Immediately, White House press secretary Karoline Leavitt told reporters Tuesday. A 25% tariff on imported car parts is scheduled for no later than May 3.
What Tariffs Has Trump Already Imposed?
A 25% tariff on all products from Canada and Mexico not subject to the U.S.-Mexico-Canada trade agreement, a 10% additional tariff on Chinese imports and a 25% tariff on all steel and aluminum imports.
Key Background
Few details were known about Trump’s plans headed into Wednesday’s announcement, which he was “perfecting” just hours earlier, Leavitt told reporters Tuesday. Trump, on the campaign trail, had repeatedly floated a 20% universal tariff on all goods imported to the U.S., though he’s suggested more recently he would tax goods from other countries according to the levies they impose on U.S. products and has also proposed sector-specific tariffs on industries such as pharmaceuticals, lumber and semiconductors. Treasury Secretary Scott Bessent said last month the tariffs would target the “dirty 15,” or the 15% of countries that account for the bulk of trade with the U.S. Trump was also expected to announce when he’d trigger 25% tariffs on all imports from Canada and Mexico that he threatened in March, then delayed for a month for products subject to the U.S.-Mexico-Canada trade agreement, though he did not mention the paused tariffs in his Wednesday announcement.
Further Reading
Here’s What To Know About ‘Liberation Day’—From Announcement Time To What Trump May Target (Forbes)
Forbes Recession Tracker: Recession Odds Spike As Trump’s Tariff ‘Liberation Day’ Approaches (Forbes)
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