On April 2, US President Donald Trump announced the implementation of tariffs on all imported goods, except those deemed critical for production and national security. The tariffs apply to all countries and territories – even those inhabited solely by penguins – with a minimum rate of 10% and up to 49% for certain nations.
A base tariff of 10% on all imported goods.
Some countries face additional tariffs, with the highest rates imposed on:
The strangest part of Trump's tariff implementation: a 10% tariff was imposed on Heard and McDonald Islands, a group of islands near Antarctica that are considered Australian territory. There are no people on these islands—the population consists mostly of... penguins.
China and EU Threaten Retaliation
China's Ministry of Commerce condemned the move, arguing it disrupts trade agreements reached in previous negotiations.
“China strongly opposes this and will take countermeasures to protect its rights and interests,” the ministry stated.
In response, China has:
Meanwhile, the EU has signaled its willingness to negotiate but has already agreed on an initial package of countermeasures. European Commission President Ursula von der Leyen stated that the tariffs will negatively impact businesses and consumers worldwide, adding that the EU is prepared to escalate its response if talks with Washington fail.
Analysts at Bloomberg warned that Trump’s tariffs could destabilize global trade, increase inflation, and raise the cost of goods by trillions of dollars annually.
Following the announcement, Trump declared a national emergency over the trade imbalance, calling it a threat to national security.
Stock Market Reaction:
Companies dependent on imports, like Nike, Gap, and Lululemon, saw stock prices drop by at least 7%.
Apple shares, which rely on Chinese supply chains, fell 6.9%.
Currency and Commodity Markets:
The US dollar weakened against major currencies, with the ICE DXY Index down 0.99%.
WTI crude oil prices fell 1.4%, dropping to $70.73 per barrel.
Bloomberg Economics estimated that the tariffs could impact $33 trillion in global trade, causing exports to the US from some nations to decline by 4-90%.
Impact on Russia
Trump’s tariffs do not affect Russia, Belarus, Cuba, or North Korea, as these countries are already subject to sanctions. According to US Treasury Secretary Scott Bessent, the tariffs were applied based on the principle of "reciprocity," meaning they target nations that have active trade with the US.
However, Trump warned that if Russia fails to negotiate a peace deal regarding Ukraine, he may impose 25% tariffs on Russian oil and other products within a month.
Experts believe that, in the short term, the tariffs will have minimal impact on Russia, as US-Russia trade has already declined significantly since 2022. In 2024, bilateral trade between the two nations amounted to $3.5 billion, the lowest level since 1992. Russia primarily exports fertilizers, nuclear fuel, and platinum-group metals to the US – items that are not currently subject to sanctions.
While direct effects may be limited, some analysts warn that a global trade war could reduce demand for commodities like metals, oil, and petroleum products, negatively impacting Russian exports.
Trump’s tariffs have triggered global economic uncertainty, with the EU and China preparing countermeasures. Meanwhile, markets are already reacting negatively to the increased trade tensions. While Russia is not immediately affected, a prolonged trade war could reshape global supply chains and economic dynamics.
Who stands to benefit? The Wall Street Journal suggests Brazil may emerge as a winner, as it could replace some US-bound exports from countries now hit with tariffs. In contrast, the EU is seen as one of the biggest losers due to its reliance on trade with the US.
As Trump pushes his "Make America Great Again" economic agenda through protectionist policies, the question remains:
Will this strategy boost the US economy, or will it backfire by destabilizing global trade?