US President Donald Trump announced on Wednesday, April 2, that he is imposing "reciprocal" – or retaliatory – tariffs on countries worldwide. "I will sign a historic Executive Order instituting reciprocal tariffs on countries throughout the world. Reciprocal that means: they do it to us, and we do it to them," he said at the White House. "This is one of the most important days, in my opinion, in American history."
Speaking in the White House Rose Garden against a backdrop of US flags, Trump slapped the most stinging tariffs on China and the European Union on what he called "Liberation Day." As Trump was speaking, the dollar fell 1% against the euro and slipped against other major currencies.
Trump said "our country has been looted, pillaged, raped, plundered" by other nations. The aggressive rhetoric came as Trump showed a willingness to dismantle a global economic system that the United States helped to build after World War II. Trump held up a chart while speaking showing the United States would charge a 34% tax on imports from China, a 20% tax on imports from the European Union, 25% on South Korea, 24% on Japan, 32% on Taiwan and 26% on India.
"Taxpayers have been ripped off for more than 50 years," Trump said. "But it is not going to happen anymore." The president has promised that factory jobs will return to the US as a result of the taxes, but his policies risk causing a sudden economic slowdown as consumers and businesses could face sharp price hikes on autos, clothes and other goods.
The tariffs are expected to follow similar recent announcements of 25% taxes on auto imports; levies against China, Canada and Mexico; and expanded trade penalties on steel and aluminum. Trump has also imposed tariffs on countries that import oil from Venezuela and he plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips. None of the warning signs about a falling stock market or consumer sentiment turning morose has caused the administration to second-guess its strategy publicly.
'Dire for millions of people'
Trump's announcement of a new 20% tariff on the EU drew a sharp rebuke from European Commission President Ursula von der Leyen, who said it was a "major blow to the world economy."
"The consequences will be dire for millions of people around the globe," von der Leyen said. Groceries, transport and medicines will cost more, she said while visiting Uzbekistan, "And this is hurting, in particular, the most vulnerable citizens."
Von der Leyen acknowledged that the world trading system has "serious deficiencies" and said the EU was ready to negotiate with the US but also was prepared to respond with countermeasures.
French President Emmanuel Macron will meet on Thursday with representatives of French sectors "impacted by the tariff measures," his office said. French government spokesperson Sophie Primas told broadcaster RTL on Thursday that the EU is "ready for a trade war" with the US and plans to "attack online services."
"We are pretty sure that we are indeed going to have an adverse effect on production," she said while expressing particular concern about the impact on wine and spirits.
Beijing said it "firmly opposes" the new tariffs on its exports and vowed "countermeasures to safeguard its own rights and interests." The tariffs "do not comply with international trade rules," China's Commerce Ministry said.
Canadian Prime Minister Mark Carney warned the tariffs will "fundamentally change the global trading system."
"We are going to fight these tariffs with countermeasures. We are going to protect our workers," he said.
"A global tariff war has become a reality," said acting Korean president Han Duck-soo. Han convened an emergency task force and vowed to mobilize "all government resources" to overcome the "trade crisis," urging ministers to minimize the damage through aggressive negotiations with Washington.
The German Automotive Industry Association said the tariffs would "only create losers" and urged the EU to act "with necessary force, while continuing to signal its willingness to negotiate."