News
US President announces new sweeping tariffs on imports from all countries
On April 2, 2025, US President Donald Trump announced baseline 10% tariff on imports into the US from all countries, except those goods which are compliant with the USMCA free trade agreement between Mexico, Canada and the United States. Non-compliant goods will continue to be charged at a 25% rate. Additionally, there will be even higher rates on countries that have the highest trade deficits with the United States.
“Discounted” Reciprocal Tariffs on countries:
At a White House event on Wednesday, Trump held up charts detailing the percentage tariff charged on each individual country, being half the rate at which they charge the US. The Reciprocal Tariffs will go into effect on April 9 midnight ET.
The USA Reciprocal Tariffs on China being at 34%, India at 26%, Thailand at 36%, European Union at 20%, Vietnam at 46% and the highest being Cambodia at 49%.
Trump said the “Reciprocal Tariffs” are a response to the duties and other non-tariff barriers put on the US goods. He also claimed that the tariffs would create more manufacturing in the US. However, this also threatens to accelerate the emerging global trade war and inflate prices for American consumers. The US will impose a 25% tariff on all foreign-made automobiles effective at midnight ET, this is expected to hit Japan particularly hard as automotive industry is an important sector of Japan’s economy.
The South Asian region will bear the brunt of the US tariffs. Sri Lanka was imposed with 44% tariff which is the highest in the region. US being top market for Bangladesh’s garment industry, the 37% tariff rate will have a deep impacted on their exports. India was imposed with a 26% rate, despite several of its earlier concessions. The only saving grace now is bilateral trade agreement which India is negotiating with the US.
The Chinese Commerce Ministry said that it will take retaliatory measures to safeguard their own rights and interests. China already subject to 20% across-the-board tariff on exports to the US, was imposed with another 34% as a Reciprocal Tariff. The European Union is also preparing countermeasures to the tariff announcement.
Market Reactions post the Tariff Announcement:
US Stock market had closed at higher trend ahead of Trump’s Liberation Day Tariff Announcement but began to stumble as he revealed his plan for rolling out the tariffs. Worldwide Stock market took a hit following the tariff announcement. When opened on Thursday, Japan’s benchmark Nikkei 225 index tumbled nearly 4%, Hong Kong’s benchmark Hang Seng Index was down about 1.15%, Australia’s ASX 200 dropped by 1.79%, Vietnam’s benchmark VN Index fell more than 5%, in Europe, the benchmark Stoxx 600 index was trading 1.3% lower. Meanwhile, gold hit a new record high just above $3,160 an ounce according to Reuters.