U.S. President Donald Trump took a big step toward his promise of imposing high tariffs on other countries that charge high duties on American goods. On April 2, which he called ‘Liberation Day’ for the U.S. economy, Trump announced a 10% tariff on almost all imported goods. He also introduced reciprocal tariffs on about 60 countries in response to their high charges on American products.

Trump announced while holding a chart that listed the countries affected by the new tariffs. The chart showed how much these nations charge the U.S. and how much they will now be charged in return. The list included major trade partners like India, China, Vietnam, and the European Union.

The full impact of these tariffs is still uncertain, but experts warn that they could spark a global trade war or cause instability in the world economy.’

About reciprocal tariff

The US will impose a 10% base tariff on most imported goods starting April 5, with additional reciprocal tariffs from April 9. These tariffs target countries with currency manipulation, weak labour and pollution laws, and restrictive regulations that make it difficult for US businesses to compete globally.

Several key US trading partners will face significant tariff increases. China will be hit with 34%, India with 26%, and the European Union with 20%. Vietnam faces the highest at 46%, followed by Thailand (36%), Taiwan (32%), South Korea (25%), and Japan (24%).

For China, the 34% tariff comes in addition to the 20% duty imposed in February over fentanyl trafficking, bringing its total to 54%, according to US Treasury Secretary Scott Bessent. Meanwhile, Russia has not been subjected to any new tariffs under this policy.

In a major blow to China, Trump ended the duty-free exemption for small parcels from China and Hong Kong worth less than $800. This change is expected to make low-cost Chinese products more expensive for American consumers and could significantly impact businesses that rely on these imports.

According to Trump’s executive order, any Chinese product previously benefiting from this small parcel loophole will now be subject to a 30% duty or a $25 charge per item, with the fee increasing to $50 per item from June 1. The rapid expansion of Chinese e-commerce giants like Shein and Temu has contributed to a surge in shipments, making it challenging for US officials to monitor and regulate incoming goods. This move aims to level the playing field for American retailers, who have long complained about unfair competition from ultra-cheap Chinese imports.

Meanwhile, Canada and Mexico, two of America’s biggest trading partners, were exempted from the Liberation Day reciprocal tariffs. However, they are already facing a 25% tariff, which was imposed earlier this year over concerns that they were not doing enough to control border security and fentanyl trafficking.

Certain imports that already have a 25% tariff under Section 232 of the Trade Act of 1962, including autos, auto parts, steel, and aluminium, will be excluded from the new reciprocal tariffs. Other industries, such as copper, lumber, semiconductors, and pharmaceuticals, which are under national security investigations, will also be exempt.

Trump is using the International Emergency Economic Powers Act (IEEPA) to justify these tariffs, a law typically used for economic sanctions rather than trade duties. He previously invoked this law to impose tariffs on Canada, Mexico, and China earlier this year.

While the tariffs aim to protect American businesses, they may lead to higher prices for consumers. US companies that manufacture products in the affected countries or rely on imports could be forced to raise prices or cut imports, making everyday goods more expensive.

 

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