A new era in global trade has begun as U.S. authorities implemented a sweeping 10% tariff on imports starting Saturday, with higher rates looming for major trading partners. The move marks a dramatic shift from post-World War II trade norms, introducing President Donald Trump’s vision of "reciprocal" tariffs set to escalate tensions worldwide.
The baseline tariff, affecting nations from Australia to Saudi Arabia, triggered immediate market turbulence. S&P 500 companies lost $5 trillion in value within two days, while recession fears drove investors toward safer assets. "This is the single biggest trade action of our lifetime," said trade lawyer Kelly Ann Shaw, highlighting the policy's transformative potential.
China responded swiftly with 34% counter-tariffs on U.S. goods and rare earth mineral export curbs, declaring markets had "spoken" against Trump’s measures. European Union imports face 20% levies next week, while rates for Japan, Vietnam, and Israel range up to 46%.
Global leaders expressed alarm, with France’s Emmanuel Macron calling for unity to protect businesses. Negotiations are underway as British and Israeli officials seek exemptions, while Italy warned against retaliatory moves. A 51-day grace period offers temporary relief for pre-Saturday shipments.
Analysts predict prolonged market volatility as countries navigate the new landscape. With exemptions for pharmaceuticals and semiconductors under review, businesses brace for further uncertainty in supply chains crucial to Asian manufacturing hubs.
