On April 3, 2025, President Donald Trump announced a significant shift in U.S. trade policy, imposing a 10% tariff on all imports starting April 5, 2025, at 12:01 a.m. EDT. This measure aims to address the persistent trade deficit and encourage domestic manufacturing.
In addition to the baseline tariff, the administration will implement "reciprocal tariffs" ranging from 20% to 46% on countries with which the U.S. has substantial trade deficits. China faces a total tariff burden of 54%, while the European Union and Japan are subject to 20% and 24% tariffs, respectively.
These actions have elicited global concern. European Commission chief Ursula von der Leyen described the tariffs as a "major blow to the world economy," and leaders from Australia, Canada, and other nations have criticized the move, warning of potential retaliation and negative impacts on international relations.
Financial markets reacted swiftly, with significant declines observed in Asia, Europe, and the U.S. Vietnam's stock index plummeted by 6.8%, and major indices in Japan and Europe also saw substantial drops. Wall Street experienced sharp losses, with the S&P 500, Nasdaq, and Russell 2000 indices falling up to 5.5%. The U.S. dollar weakened to a six-month low, fueling concerns about a broader economic downturn.
Economists warn that these tariffs could lead to slowed U.S. economic growth, increased inflation, and potential job losses in sectors reliant on international supply chains. The situation remains fluid, with international leaders exploring avenues for negotiation and potential countermeasures.
