Economy

Trump Escalates Global Trade War With Sweeping Tariffs

Thursday 03 April 2025 - 08:30

By: Zahouani Ilham

Trump Escalates Global Trade War With Sweeping Tariffs

U.S. President Donald Trump intensified a global trade dispute by imposing broad tariffs on imports from both allies and adversaries, disrupting financial markets and challenging long-standing free trade principles.

The European Union and China quickly announced retaliatory measures, while Australian officials criticized the move as harmful to allied relations. Following Trump's proclamation, a 25% tariff on all foreign-made cars and light trucks took effect, with additional tariffs on auto parts set for May 3.

Presenting a chart of the new policies at the White House Rose Garden, Trump declared the day a "Liberation Day" for the U.S. economy, referring to the tariffs as a declaration of "economic independence." However, China warned that the measures could destabilize global economic growth.

Markets responded with high volatility, as Japan’s Nikkei dropped over 4%, and Vietnam’s stock market fell by more than 5% due to a 46% tariff imposed on its exports. U.S. futures declined sharply, and gold prices surged as investors sought safe-haven assets.

Trump targeted "nations that treat us unfairly," imposing a 34% increase on Chinese goods—bringing the total tariff to 54%—and setting tariffs of 20% on the EU and 24% on Japan. Britain was not spared, facing a 10% tariff along with other trading partners.

Despite global backlash, Trump dismissed concerns, claiming the tariffs would restore America’s economic strength. Addressing a handpicked crowd of industry workers, he proclaimed his policy would "Make America Wealthy Again."

While Trump described the tariffs as "reciprocal," experts questioned the accuracy of his claims regarding foreign tariffs on U.S. goods. His administration’s warnings of economic escalation if countries retaliated only fueled concerns of a deepening trade war.

Asian nations faced particularly heavy tariffs, including Cambodia (49%), Vietnam (46%), and Myanmar (44%). Russia remained unaffected due to existing sanctions. Certain commodities, such as copper, semiconductors, and pharmaceuticals, were exempt.

European Commission President Ursula von der Leyen promised a firm response, while Italian Prime Minister Giorgia Meloni, a Trump ally, criticized the move but sought negotiations. Britain, after diplomatic efforts, aimed to reduce its impact.

Canada and Mexico were spared from the new tariffs, having already faced penalties over drug trafficking and immigration concerns. However, Canadian Prime Minister Mark Carney vowed to resist existing levies.

Trump’s announcement marked a long-standing belief in tariffs as a solution to trade imbalances. The 10% baseline tariff begins Saturday, with harsher penalties for "worst offenders" effective April 9.