Hadisur Rahman, Jadetimes Staff
H. Rahman is a Jadetimes news reporter covering the USA
In a bold move that is set to redefine U.S. trade policy, President Donald Trump has imposed a sweeping set of tariffs affecting all U.S. trading partners. Announced on April 2, 2025, these tariffs aim to address America's longstanding trade deficits and bolster domestic manufacturing. However, economic experts warn of potential repercussions, including rising consumer prices, market volatility, and a potential economic downturn.
A 10% Baseline Tariff for All Countries
The new policy mandates a universal 10% tariff on imported goods from all countries. This marks a significant departure from previous trade policies, as Trump leverages the International Emergency Economic Powers Act of 1977 to justify the tariffs. The administration argues that chronic trade deficits pose a national security threat, necessitating immediate action. The U.S. imported $1.2 trillion more in goods in 2024 than it exported, prompting the administration to take an aggressive stance on trade.
Targeted Tariffs on 60 Countries
In addition to the baseline tariff, Trump has introduced targeted tariffs on approximately 60 nations, focusing on those contributing most to the U.S. trade deficit and imposing barriers on American exports. The reciprocal tariffs vary by country, with Southeast Asian nations facing some of the highest rates—Cambodia (49%), Laos (48%), and Vietnam (46%). China faces a compounded tariff of 54%, combining a new 34% tariff with existing 20% duties. Other key trading partners, such as the European Union and India, will see additional tariffs of 20% and 26%, respectively.
Exemptions for Mexico and Canada
Mexico and Canada are notably exempt from these new tariffs, though a 25% tariff imposed in response to migration and drug-related concerns remains in place. Under the United States-Mexico-Canada Agreement (USMCA), compliant goods from these countries will continue to be tariff-free, while non-compliant imports will face a 25% tariff. Energy products and potash from Canada and Mexico will be subjected to a lower 10% tariff.
Economic Concerns and Potential Recession
While the Trump administration touts these tariffs as a means of revitalizing American manufacturing, economists express serious concerns. Mark Zandi, Chief Economist at Moody’s, warns that such high tariffs could slow economic growth, increase consumer prices, and hurt corporate profits. If fully implemented without exemptions or modifications, experts predict a potential recession.
Trump’s executive order does include a "modification authority" provision, which allows him to adjust tariff rates based on economic responses and potential negotiations with affected countries.
Expected Retaliation from U.S. Trading Partners
In response to the tariffs, major U.S. trading partners, including the European Union, are preparing countermeasures. EU Commission President Ursula von der Leyen has indicated that Europe will take decisive action if necessary, with all options on the table.
U.S. Treasury Secretary Scott Bessent has warned against retaliation, stating that any countermeasures could lead to further escalation. "My advice to every country right now is do not retaliate. Sit back. Take it in. Let's see how it goes. Because if you retaliate, there will be escalation," Bessent said in an interview with Fox News.
Trump’s new tariffs mark a pivotal shift in U.S. trade policy, with far-reaching consequences for the global economy. While the administration hopes to strengthen domestic manufacturing and reduce trade deficits, the potential risks of inflation, economic slowdown, and an intensified trade war remain significant. As the tariffs take effect, all eyes will be on how global markets, businesses, and governments react in the coming months.
