Silke Mayr On April 5, President Donald Trump implemented a new tariff plan, imposing a 10% duty on nearly all foreign goods entering the United States. The move, announced through an executive order, is designed to enhance economic independence and address trade imbalances, according to the Trump administration. The tariff plan has caused immediate disruptions in global financial markets, as importers will now be required to pay a fee to the U.S. government on nearly every imported product.
Impact of the 10% Tariff on Global Trade
Under the new tariff structure, most foreign goods entering the U.S. will be subject to the 10% import duty. Although the importers will directly pay this fee, experts warn that consumers may experience higher prices as a result of the added costs. However, certain countries face the 10% baseline tariff with no additional increases. These nations, considered strategic trade partners, include the United Kingdom, Singapore, Brazil, Australia, New Zealand, Turkey, Colombia, Argentina, El Salvador, United Arab Emirates, and Saudi Arabia.
Additional Tariffs for Countries with Unfair Trade Practices
In addition to the 10% tariff, the Trump administration has imposed steeper duties on about 60 countries. These tariffs are aimed at nations that are believed to impose higher duties on U.S. goods or indirectly restrict American imports. Effective April 9, these countries will face additional tariffs as part of the new trade policy.
The following trade partners will experience higher tariffs beyond the baseline 10% rate:
- European Union: 20%
- Vietnam: 46%
- Thailand: 36%
- Japan: 24%
- Cambodia: 49%
- South Africa: 30%
- Taiwan: 32%
Each country’s total duties combine the 10% base tariff with an additional penalty specific to that nation.
China Faces Harshest Tariffs Following Retaliation
China, a major trade partner of the U.S., faces the highest penalties under this new tariff framework. While a 20% tariff on Chinese goods was introduced in March, a further 34% tariff was imposed in April. This aggressive move came after China retaliated with its own 34% duty on U.S. imports. In response, President Trump announced a dramatic increase in tariffs, raising the total U.S. tariff on Chinese goods to 104%.
This triple-layered tariff structure represents the most severe stance the U.S. has taken against China. Additionally, starting May 1, Trump ordered tariffs on low-cost imports from China and Hong Kong. Previously, goods valued under $800 were exempt from tariffs, but this exemption will no longer apply to items from these regions, significantly affecting small-scale imports.
Canada and Mexico Remain Exempt from New Tariffs
While most of the world faces new tariffs, both Canada and Mexico have been exempt from this latest round of duties. The 10% global base tariff does not apply to these two countries. According to the Trump administration, trade with Canada and Mexico will continue to be handled under existing measures. These earlier measures were primarily focused on concerns over drug imports and border security. Notably, Trump previously imposed 25% tariffs on imports from Mexico and Canada, but adjustments and delays have resulted in some goods from these countries being exempted from new duties.
Industry-Specific Exemptions and Clarifications
The new tariff plan does include some exemptions for certain products. A White House document confirmed that items not produced domestically, such as copper, pharmaceuticals, semiconductors, lumber, energy, and bullion, will not be subject to the expanded tariffs. Additionally, materials related to communication, charitable donations, and informational goods will also be exempt. Steel, aluminum, automobiles, and auto parts, however, are excluded from this round of tariffs, as they are already subject to separate 25% duties under previous industrial sector policies.
Economic Impact and Future Trade Relations
The new tariff plan is expected to have wide-ranging economic impacts. The immediate effects on global markets, particularly for importers and consumers, are already being felt. The additional tariffs on major trade partners, especially China, mark a significant escalation in the U.S. trade war. As the situation develops, it remains to be seen how other countries will respond and whether further retaliation will follow.