US President Donald Trump announced a 10 percent “minimum baseline tariff” for all imports into the US, with dozens of countries hit with rates multiple times higher.
Trump’s tariffs trigger an immediate backlash, with US ally Australia blasting them as “unwarranted” and Italy calling them “wrong”, while other countries have already vowed retaliation.
Speaking at the “Make America Wealthy Again” event in the Rose Garden, Trump says the US “has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike” for decades.
Trump announced 25-percent tariffs on auto imports last week on all cars and parts made outside the US.
Trump revealed his long-awaited “Liberation Day” trade plan, announcing a baseline 10 percent tariff on all US imports as well as higher duties on dozens of select countries.
China and the EU promised to roll out “countermeasures” in response, raising fears of an escalating global trade war.
Global stocks fell sharply as the scale of Trump’s tariffs took many investors by surprise.
World markets continue to slide as trade war looms over Trump tariffs
The Reuters news agency reports that world markets have been left reeling due to Trump’s tariffs.
Stock markets have tumbled, and investors are dashing to the relative safety of bonds, gold and the yen.
S&P 500 futures dropped 3 percent, suggesting investors expect deep losses when Wall Street opens later today.
US Treasury yields slid and China’s yuan dropped to a seven-week low.
“We will likely see retaliation from Europe but it’s clear countries will think about how to retaliate in a politically astute way,” said Justin Onuekwusi, chief investment officer at the investment firm St James’s Place, in London.
“Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession,” he said.
“We have raised global recession risks to 35 percent from 15 percent,” he added.
Japan’s Daiwa Institute of Research estimated that Trump’s 24 percent reciprocal tariffs could lower the country’s real GDP by 0.6 percent this year, after growing just 0.1 percent in 2024.
Real GDP is similar to GDP, except that it is adjusted for inflation.
The tariff follows a previously announced 25 percent tariff on most vehicle imports to the US, as well as key auto parts, that also went into effect on Thursday.
The car tariff is expected to inflict damage on Japan’s auto industry, which contributes 3 percent of its GDP.
In response, the Nikkei share average fell to an eight-month low on Thursday, wiping out 18.7 trillion yen ($127bil) of market value.
EU ready for ‘trade war’ over Trump tariffs, eyeing US online services: France
The EU is “ready for a trade war” with the US and could “attack online services”, French government spokesperson Sophie Primas said.
“We are pretty sure that we are indeed going to see an adverse effect on production,” Primas told French broadcaster RTL, expressing particular concern about the “strong” impact on French wines and spirits as a result of the US tariffs.
Primas said the EU was preparing a two-stage response, with “an initial response”, to be put in place around mid-April, concerning aluminium and steel.
Then the EU will target “all products and services”, with the measures probably ready at the end of April, she said, adding this was still being discussed.
“We have a whole range of tools, and we are ready for this trade war,” she said.
“We are also going to attack services. For example, online services, which are not taxed today but could be,” Primas said.
US economist Larry Summers estimates losses of $30 trillion or more
While estimates are still coming in, the renowned US economist Larry Summers predicted losses of $30 trillion or more from the new round of tariffs – up from a prediction of $20 trillion just hours earlier.
“Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now closer to $30 trillion or $300,000 per family of four,” he said on X.
Summers previously told Bloomberg that the tariff hikes are set to unleash an “oil crisis-like shock to the economy”.
“This is the kind of thing you discuss in the way we would usually discuss an oil-price spike or earthquake or a drought, as a supply shock,” he said on Bloomberg Television’s Wall Street Week. “The question is mostly how much damage is going to be done.” (https://www.aljazeera.com/news/liveblog/2025/4/2/trump-tariffs-live-news-liberation-day-plan-puts-markets-on-high-alert)
