US President Donald Trump has doubled down on broad new tariffs that took effect on Saturday, causing instant market turmoil and eliciting sharp reactions from world leaders. With a 10 percent “baseline” tariff now applying to most US imports—except Canada and Mexico—Trump has invoked emergency economic authority to deploy what he terms an “economic revolution.”
“We have been the dumb and helpless ‘whipping post,’ but not any longer. We are bringing back jobs and businesses like never before,” Trump posted on Truth Social, calling on Americans to remain patient through what he characterized as painful measures for future reward. “Hang tough, it won’t be easy, but the end result will be historic.”
The White House indicated exclusions continue for key industries like pharmaceuticals, copper, semiconductors, and energy products. Trump has already initiated investigations into copper and lumber, however, indicating more levies are on the horizon.
Global Leaders Push Back
Trump’s aggressive trade stance has alarmed major global economies. French President Emmanuel Macron and British Prime Minister Keir Starmer held a joint call, warning that while “nothing should be off the table” in response, “a trade war was in nobody’s interests.”
At the same time, Japan’s Prime Minister called for a “calm-headed” response after the US imposed 24 percent tariffs on Japanese products. The European Union’s trade commissioner, Maros Sefcovic, promised a “united, carefully phased” response while stressing that the bloc “won’t stand idly by.”
The new levies impact about 60 countries, with the European Union, Japan, and China among the countries that will now pay significantly more from April 9. China will impose a 34 percent retaliatory tariff on US products from April 10, as well as initiate a lawsuit in the World Trade Organization and impose export bans on rare earth materials.
Elon Musk Breaks Rank
In an unexpected departure from Trump’s inner circle, technology tycoon Elon Musk expressed optimism for a sustained move toward a “zero-tariff situation,” essentially suggesting a free-trade zone between North America and Europe. Musk spoke while negotiating with Italy’s far-right Deputy Prime Minister Matteo Salvini in Rome.
Market Meltdown on Wall Street
Markets responded with outrage to the implementation of tariffs. Wall Street plunged into freefall on Friday, following huge declines in Asia and Europe. Economists have cautioned that the tariffs will strangle global growth and accelerate inflationary pressures.
Trump’s actions add to already-imposed 25 percent tariffs on steel, aluminum, and autos. New auto tariffs have already affected production in Canadian and Mexican factories, with Jeep-owner Stellantis halting operations.
Oxford Economics puts the new tariffs at increasing the average tariff rate in the US to 24 percent—higher even than during the 1930s Great Depression under the notorious Smoot-Hawley Tariff Act.
Growing Tensions and Threat of Retaliation
The staggered implementation provides trading partners a short window of negotiation, but analysts predict retaliation is highly likely. “If they can’t get a reprieve, they are likely to retaliate, as China already has,” Oxford Economics cautioned.
The EU has threatened a digital services tax on American technology giants. China, meanwhile, has already taken several retaliatory measures, from filing a WTO case to announcing vital export bans.
Canada and Mexico are, for now, exempted from the new tariffs under current duties that are bound by North American free trade agreements. They are still facing tariffs for controversies surrounding immigration and fentanyl smuggling.
