WASHINGTON, April 3 — United States President Donald Trump yesterday unveiled a 10 per cent minimum tariff on most goods imported by the US, with much higher duties on products from dozens of countries, kicking into high gear a global trade war that threatens to drive up inflation and stall US and worldwide economic growth.
The sweeping duties, which drew bewildered condemnation from many long-standing US allies who found themselves tagged with unexpectedly high tariffs, promise to erect new barriers around the world’s largest consumer economy, reversing decades of trade liberalisation that have shaped the global order.
Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine.
US Treasury chief Scott Bessent urged other countries to not retaliate.
“Let’s see where this goes, because if you retaliate, that’s how we get escalation,” Bessent told CNN. “Doing anything rash would be unwise,” he added.
Bessent was asked how he expected stock markets to react to the tariffs, to which he replied: “I don’t know.”
Stocks slumped after the announcement.
Japan’s Nikkei hit an eight-month low in early trading today, while US and European stock futures dropped sharply following weeks of volatile trading driven by uncertainty over the escalating trade war.
US stocks have erased nearly US$5 trillion (RM22.35 trillion) of value since mid-February.
Chinese imports will be hit with a 34 per cent tariff, on top of the 20 per cent Trump previously imposed, bringing the total new levy to 54 per cent. Close US allies were not spared, including the European Union, which faces a 20 per cent tariff, and Japan, which is targeted for a 24 per cent rate. The base rates go into effect on April 5 and the higher reciprocal rates on April 9.
The effective US import tax rate has shot to 22 per cent under Trump from just 2.5 per cent in 2024, said head of US research at Fitch Ratings, Olu Sonola.
“That rate was last seen around 1910,” Sonola said in a statement. “This is a game changer, not only for the US economy, but for the global economy. 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.”
The “reciprocal” tariffs, Trump said, were a response to duties and other non-tariff barriers put on US goods. He argued that the new levies will boost manufacturing jobs at home.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said at an event at the White House’s Rose Garden.
Outside economists have warned that tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average US family by thousands of dollars.
Canada and Mexico, the two largest US trading partners, already face 25 per cent tariffs on many goods and will not face additional levies from yesterday’s announcement.
Even some fellow Republicans have expressed concern about Trump’s aggressive trade policy.
Within hours of the announcement, the Senate voted 51-48 to approve legislation that would terminate Trump’s Canadian tariffs, with a handful of Republicans breaking with the president. Passage in the Republican-controlled US House of Representatives, however, was seen as unlikely.
Trump’s top economist, Stephen Miran, told Fox Business yesterday the tariffs would work out well for the US in the long run, even if they cause some initial disruption.
“Are there going to be short-term bumps as a result? Absolutely,” Miran, the chairman of Trump’s Council of Economic Advisers, told the network’s “Kudlow” program.
Ending ‘de minimis’
The reciprocal tariffs do not apply to certain goods, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals that are not available in the United States”, showed a White House fact sheet.
Following his remarks, Trump also signed an order to close a trade loophole used to ship low-value packages — those valued at US$800 or less — duty-free from China, known as “de minimis”. The order covers goods from China and Hong Kong and will take effect on May 2, according to the White House, which said the move was intended to curb the flow of fentanyl into the US.
Chinese chemical makers are the top suppliers of raw materials purchased by Mexico’s cartels to produce the deadly drug, US anti-narcotics officials say. A Reuters investigation last year showed how traffickers often route these chemicals through the US by exploiting the de minimis rule. China has repeatedly denied culpability.
Trump is also planning other tariffs targeting semiconductors, pharmaceuticals, and potentially critical minerals, the official said.
Trump’s barrage of penalties has rattled financial markets and businesses that have relied on trading arrangements that have been in place since the middle of last century.
Earlier in the day, the administration said a separate set of tariffs on auto imports that Trump announced last week will take effect today.
Trump previously imposed 25 per cent duties on steel and aluminum and extended them to nearly US$150 billion worth of downstream products.
Tariff concerns have already slowed manufacturing activity across the globe, while also spurring sales of autos and other imported products as consumers rush to make purchases before prices rise.
European leaders reacted with dismay, saying a trade war would hurt consumers and benefit neither side.
“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favor of other global players,” Italy Prime Minister Giorgia Meloni said.
US representative Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, said he would introduce legislation to end the tariffs. Such a bill has little chance of passing the Republican-controlled Congress, however.
“Trump just hit Americans with the largest regressive tax hike in modern history — massive tariffs on all imports. His reckless policies are not only crashing markets, they will disproportionately hurt working families,” Meeks said.
[caption id="attachment_395903" align="aligncenter" width="1200"]
United States President Donald Trump delivers remarks on tariffs at the White House in Washington DC, the United States, on April 2, 2025. — Picture by REUTERS[/caption]
“In many cases, the friend is worse than the foe in terms of trade,” Trump said during the tariff announcement.
“We subsidise a lot of countries and keep them going and keep them in business,” he said about trade partners, specifically Mexico and Canada. “Why are we doing this? I mean, at what point do we say ‘you got to work for yourselves’?”
“We are finally putting America first. Trade deficits are no longer merely an economic problem. They are a national emergency,” he added.
With a few exceptions, based on the charts Trump read out, the tariff rate being imposed by the US on most countries was around half of what those countries charge. There were some exceptions in which the US charged the exact rates as those countries, according to the chart.
“This is not full reciprocal, it is kind reciprocal,” Trump said.
The list of new tariff rates is below.
Lesotho: 50 per cent
Cambodia: 49 per cent
Laos: 48 per cent
Madagascar: 47 per cent
Vietnam: 46 per cent
Sri Lanka: 44 per cent
Myanmar: 44 per cent
Mauritius: 40 per cent
Guyana: 38 per cent
Botswana: 37 per cent
Liechtenstein: 37 per cent
Bangladesh: 37 per cent
Serbia: 37 per cent
Thailand: 36 per cent
Bosnia and Herzegovina: 35 per cent
China: 34 per cent
North Macedonia: 33 per cent
Fiji: 32 per cent
Taiwan: 32 per cent
Indonesia: 32 per cent
Switzerland: 31 per cent
Algeria: 30 per cent
South Africa: 30 per cent
Pakistan: 29 per cent
Tunisia: 28 per cent
Kazakhstan: 27 per cent
India: 26 per cent
South Korea: 25 per cent
Brunei: 24 per cent
Japan: 24 per cent
Malaysia: 24 per cent
Namibia: 21 per cent
Côte d’Ivoire: 21 per cent
European Union: 20 per cent
Jordan: 20 per cent
Nicaragua: 18 per cent
Israel: 17 per cent
Philippines: 17 per cent
Venezuela: 15 per cent
Norway: 15 per cent
Nigeria: 14 per cent
Trinidad and Tobago: 10 per cent
Morocco: 10 per cent
Oman: 10 per cent
Uruguay: 10 per cent
Bahamas: 10 per cent
Ukraine: 10 per cent
Bahrain: 10 per cent
Qatar: 10 per cent
Iceland: 10 per cent
Kenya: 10 per cent
Haiti: 10 per cent
Bolivia: 10 per cent
Panama: 10 per cent
Ethiopia: 10 per cent
Ghana: 10 per cent
United Kingdom: 10 per cent
Brazil: 10 per cent
Singapore: 10 per cent
Chile: 10 per cent
Australia: 10 per cent
Turkey: 10 per cent
Colombia: 10 per cent
Peru: 10 per cent
Costa Rica: 10 per cent
Dominican Republic: 10 per cent
United Arab Emirates: 10 per cent
New Zealand: 10 per cent
Argentina: 10 per cent
Ecuador: 10 per cent
Guatemala: 10 per cent
Honduras: 10 per cent
Egypt: 10 per cent
Saudi Arabia: 10 per cent
El Salvador: 10 per cent
— Reuters
