The New York Times
Global Markets Tumble After Trump Unveils Tariffs
Live Updates: Wall Street Reels From Shock of Trump Tariffs
Stocks tumbled in the U.S., Asia and Europe. Allies and adversaries alike were weighing their responses.
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April 3, 2025, 9:31 a.m. ET22 minutes ago
Ana Swanson Alan Rappeport Tony Romm and Matthew Mpoke Bigg
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President Trump’s latest tariffs have rippled through the world’s economies.
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April 3, 2025, 9:31 a.m. ET22 minutes ago
Ana SwansonAlan RappeportTony Romm and Matthew Mpoke Bigg
Here’s the latest.
Wall Street opened sharply lower on Thursday, following a slump in global markets, after President Trump announced a major round of tariffs on U.S. imports. The world’s biggest economies reacted swiftly to the new levies, a significant escalation of trade tensions with the United States, and some countries warned of retaliation.
Mr. Trump had said for weeks that he would impose “reciprocal tariffs” on allies and adversaries, but the tariffs announced on Wednesday were far higher than experts had expected, and are likely to drive up prices for American consumers and manufacturers.
The S&P 500 opened down more than 3 percent, after markets in Asia and Europe also dropped. China vowed to take countermeasures to “safeguard its own rights and interests.” Its state media described the tariffs as “self-defeating bullying.”
In Brussels, Ursula von der Leyen, the European Commission president, said that the bloc would be united in its response to the tariffs. “If you take on one of us, you take on all of us,” she said. The duties posed a particular threat to attempts to revive the largest economy in Europe, Germany’s, which has been stagnant.
The response from Japan, the largest overseas investor in the United States, was more restrained. Prime Minister Shigeru Ishiba called the tariffs “extremely regrettable.” But he refrained from talk of retaliation, saying that his government was trying to impress upon the Trump administration that Japan is helping the United States to industrialize again.
Britain also did not suggest it would immediately retaliate. Instead, Prime Minister Keir Starmer said negotiations toward a trade deal with the U.S. would continue.
Business groups, trade experts, economists, Democratic lawmakers and even a few Republicans swiftly denounced the tariffs, while some industries scrambled to understand how they would be affected.
Mr. Trump framed his policies as a response to a national emergency, saying that tariffs were needed to boost domestic production.
Mr. Trump could have tried to fix the rules governing global trade, which he says allies have abused to the detriment of the U.S. economy and American consumers, said Eswar Prasad, a professor of trade policy at Cornell University. Instead, he said, “Trump has chosen to blow up the system governing international trade.”
Here’s what else to know:
Tariff rates: The United States will subject Chinese goods to a staggering new tariff of 34 percent, on top of the tariffs that Mr. Trump had already imposed since January. The European Union’s tariff was set at 20 percent, Japan’s at 24 percent, Britain’s at 10 percent and India’s at 26 percent. Mr. Trump said little about the methodology behind those calculations.
Markets fall: The market reaction suggested that the scale of the tariffs had come as a surprise. Futures on the S&P 500 slumped over 3 percent, as benchmark indexes dropped more than 3 percent in Japan and nearly 2 percent in Hong Kong and South Korea. The Stoxx Europe 600 was down more than 2 percent and Brent crude, the international oil benchmark, dropped by 3 percent.
Loophole closed: Mr. Trump also scrapped a loophole called the de minimis rule, which has been used by many e-commerce companies to send low-cost goods to the United States from China without having to pay taxes.
Auto tariffs: New tariffs on all automobiles made outside the United States took effect, adding to previous tariffs on steel, aluminum and other imports that Mr. Trump has imposed since returning to office in January.
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Jeanna Smialek
April 3, 2025, 9:21 a.m. ET32 minutes ago
Jeanna SmialekReporting from Brussels
Europe readies a response to crippling tariffs.
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Ursula von der Leyen.
Ursula von der Leyen, president of the E.U. executive arm, said Europeans felt “let down by our oldest ally.”Credit...Vyacheslav Oseledko/Agence France-Presse — Getty Images
The European Union, taken as a whole, is America’s biggest trading partner. That makes President Trump’s fresh tariffs especially painful for the 27-nation bloc — but also gives it a uniquely large amount of economic weight to throw around in response.
In the hours after Mr. Trump’s sweeping tariff announcement on Wednesday, European leaders began to make clear that they plan to do so.
Among the options: to impose trade barriers on U.S. services firms, in particular giant technology companies like Google who do a huge amount of E.U. business. And policymakers are already finalizing lists of jacked-up tariffs that could go into effect as soon as mid-April. Member state representatives are expected to vote on them next week, a senior European official said on Thursday, speaking anonymously to brief reporters.
Officials could add to those lists in the coming weeks, in response to both auto tariffs and Mr. Trump’s freshly announced 20 percent levy on the European Union. They have not yet committed to a specific plan.
Commenting on the new U.S. tariffs early Thursday morning, Ursula von der Leyen, the president of the E.U. executive arm, said, “There seems to be no order in the disorder, no clear path to the complexity and chaos that is being created,” adding that Europeans felt “let down by our oldest ally.”
The European Union was built around free trade and cooperation, and its leaders remain adamant that tariffs are bad for everyone. Europe is still trying to push for active discussions, and the E.U. trade commissioner said on social media on Thursday that he would speak to his U.S. counterparts tomorrow.
But American officials have so far shown little appetite for quick resolution. Mr. Trump’s cabinet members have at times been hard to reach, or have even canceled meetings on their European counterparts.
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A car on an assembly line.
Volvo’s Torslanda production plant in Gothenburg, Sweden. President Trump’s tariffs include levies on cars imported into the United States.Credit...Jonathan Nackstrand/Agence France-Presse — Getty Images
While Howard Lutnick, the commerce secretary, has been talking with the trade commissioner, it is unclear how much influence Mr. Lutnick has over what ultimately happens.
At the same time, the White House has made a habit of criticizing the E.U., with Mr. Trump expressing a consistent animosity. He has not met with Ms. von der Leyen since taking office. He has said the bloc was created to “screw” the United States. During the Rose Garden announcement of his new tariffs, he said the E.U. ripped America off in a way that was “pathetic.”
Later on Wednesday, Mr. Lutnick told Fox News that Europe refused to take American beef “because our beef is beautiful — and theirs is weak,” calling it “unbelievable.”
The fresh wave of tariffs are Mr. Trump’s latest move to shake up the way America’s alliances operate. The White House is already pressuring Europe to spend more on its own defense and has backed away from supporting Ukraine in its war with Russia in a way that has sent shock waves across the continent.
The United States’ pivot on military issues is front of mind as E.U. defense ministers meet Thursday in Warsaw, and as NATO foreign ministers also gather in Brussels. Marco Rubio, the U.S. secretary of state, is at the NATO meeting.
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Marcio Rubio and other officials.
Marco Rubio, the secretary of state, arriving in Brussels on Tuesday for a meeting of NATO foreign ministers.Credit...Nicolas Tucat/Agence France-Presse — Getty Images
But the deepening trade war is further turning the trans-Atlantic partnership into a trans-Atlantic rift, and Mr. Trump’s latest announcement could have far-reaching consequences that forever change the relationship between America and its longstanding allies.
The E.U. is arguably America’s most important economic relationship. It alone is responsible for nearly a fifth of American imports, and European consumers are a huge market for American services.
Still, Americans officials have made it clear that what they want is to reorder the global trading system, which has left Brussels grasping for tools that could give it some advantage in discussions.
That’s where services could come in.
European officials have already produced plans to put tariffs on a wide range of physical products in response to the recently imposed steel and aluminum levies.
Officials could tariff additional goods in response to car tariffs and the newly announced wave. But their firepower when it comes to physical products is somewhat limited: Europe sells Americans more goods than it buys from them.
In services, that balance is reversed. European consumers are a huge market for American technology products in particular, from search engines to cloud services. In 2023, the European Union ran a service deficit with the United States of 109 billion euros (nearly $120 billion).
While that makes targeting services trade a potentially powerful tool, it is also a largely untried one.
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A sign outside a fenced-off data center reading “Google Cloud.”
Google’s data center in Hanau, Germany. Europe is a major consumer of U.S. digital services, but may struggle to find homegrown alternatives.Credit...Michael Probst/Associated Press
Brussels has several tools in its arsenal that could target services, but by far the most powerful option is a new weapon it calls its “Anti-Coercion Instrument.” Created in 2021 and in force only since 2023, it allows the E.U. to hit a trading partner with a “wide range of possible countermeasures.”
Such measures could include tariffs, restrictions on trade in services and limits on trade-related aspects of intellectual property rights. That means that the E.U. could hit big technology firms, like Google. Several European diplomats said its use was a distinct possibility, should the trade war escalate.
A French official made it clear on Thursday that online services could be in the cross hairs, and German officials also talked about the need to increase pressure on the United States.
Using the weapon requires deliberations within the E.U. and efforts to rectify the problem with the trading partner. The quickest restrictions could be fully in place is probably about six months, said Joanna Redelbach, who is counsel at the law firm Van Bael & Bellis and who has closely analyzed it.
Still, it is a potentially powerful threat.
“Once it is triggered, the commission can go very far in how it responds,” she said, referring to the E.U. executive arm, the European Commission.
Using the tool would escalate a trade war that Brussels has up until this point been trying to de-escalate. And Europe often lacks homegrown alternatives when it comes to search engines or cloud services.
“It would be carefully calibrated,” said Jorn Fleck, senior director with the Europe Center at the Atlantic Council, a research institute. “It’s a difficult thing to do.”
Yet for Europe, it is becoming clear that easy options are few and far between.
“To prevent full escalation, we’d need to see progress over the next two to four weeks,” said Mujtaba Rahman, managing director for Europe at the Eurasia Group, a political research firm.
But he added that the challenge, and the reality that could lead to a painful escalation before de-escalation, was that the Trump administration seemed to respond not to carrots and offers to negotiate — the tactics Europe has tried so far — but to shows of strength.
“You have to punch the administration in the face,” he said. “The punch has to land.”
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New tariffs for select countries
Country
New
tariff
Share of
U.S. imports
Goods trade
balance
E.U.
+20%
18.5%
–$241 bil.
China
+34%
13.4%
–$292 bil.
Japan
+24%
4.5%
–$69 bil.
Vietnam
+46%
4.2%
–$123 bil.
South Korea
+26%
4.0%
–$66 bil.
Taiwan
+32%
3.6%
–$74 bil.
India
+27%
2.7%
–$46 bil.
Switzerland
+32%
1.9%
–$39 bil.
Thailand
+37%
1.9%
–$46 bil.
Malaysia
+24%
1.6%
–$25 bil.
Show 50 more rows +
Sources: White House, Observatory of Economic Complexity Notes: Trade balance and import share figures based on 2024 trade data.
(4) Trump Tariffs Live Updates: Global Markets Reel From Shock of Tariffs - The New York Times
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Meaghan Tobin
April 3, 2025, 9:10 a.m. ET43 minutes ago
Meaghan TobinReporting from Hong Kong
Trump’s tariffs don’t apply to chips, but Taiwan remains wary.
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Advanced chips like the ones made at Taiwan Semiconductor Manufacturing Company are some of Taiwan’s main exports.Credit...Lam Yik Fei for The New York Times
Taiwan, the center of the global supply chain for computer chips, woke up on Thursday to the news that President Trump had put new 32 percent tariffs on the island’s exports to the United States. Except for semiconductors.
The decision not to impose tariffs on the chip sector does not mean they won’t be coming for Taiwan or anywhere else, including South Korea, another major source of chips.
Taiwanese companies have spent decades and billions of dollars building up a network of factories that conduct the complex process of etching tiny circuits onto pieces of silicon.
These chips — and a broad range of electronic devices that contain them — are Taiwan’s main exports. And they are increasingly the focal point of the Taiwan-U.S. geopolitical relationship, which has undergone a markedly transactional shift since Mr. Trump took office.
Mr. Trump has previously said that Taiwan had gained an unfair dominance in making semiconductors and threatened to impose tariffs on the sector. He has also accused Taiwan, which depends on the United States for political support against China’s claims that Taiwan is part of its territory, of spending too little on its own security.
Officials and businesses in Taiwan have been scrambling to soften the blow of Washington’s tariff threats. Last month, President Lai Ching-te said that Taiwan was interested in buying natural gas from a long-stalled project in Alaska.
Weeks earlier, Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, said it would spend $100 billion in the United States to expand its operations in Arizona. TSMC announced plans for the plant during Mr. Trump’s first term and got a big financial assist under former President Joseph R. Biden Jr.
On Wednesday, in announcing the tariffs on Taiwan, Mr. Trump praised TSMC for investing in the United States. He and his aides are hoping other chip companies that committed to invest in U.S. operations during the Biden administration, like the South Korean giants Samsung and SK Hynix and Global Wafers of Taiwan, will pledge to spend even more.
Semiconductors are a complicated target for tariffs because the supply chain for making them is both global and extremely specialized. While most advanced chips are manufactured in Taiwan, many are then sent to another country like Malaysia for testing. Next, the chips might be put into iPhones or artificial intelligence servers in Mexico or China before those devices are sold to people all over the world.
“Very few semiconductors are actually directly imported into the United States; most are incorporated into a final product,” said Jimmy Goodrich, a senior adviser for technology analysis at the RAND Corporation.
Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, added: “It’s much more tricky than saying, ‘We are going to slap a tariff on steel.’ ”
Even the chips that TSMC makes at its Arizona factory have to leave the United States to be packaged into other devices before they make it into the hands of American consumers, said Ming-Yen Ho, a nonresident fellow at the Research Institute for Democracy, Society and Emerging Technology, a government-funded think tank in Taipei.
“Any chip that’s made in Arizona right now will have to leave the U.S. for some time before going back,” Mr. Ho said. “It’s just a fact of the global chip supply chain right now.”
Mr. Trump on Wednesday announced a 32 percent tariff on Taiwanese goods exported to the United States, where Taiwan directly sends nearly a quarter of its exports. Besides chips, which will not be taxed, Taiwan mainly exports electronic devices and components for them. The American Chamber of Commerce in Taiwan said that Taiwan plays an indispensable role in the U.S. economy and urged officials in Washington and Taipei to strengthen ties.
The Taiwanese government on Thursday condemned the tariffs as unreasonable and unfair to Taiwan. The government would lodge a strong protest with the United States Trade Representative, Lee Hui-chih, a spokeswoman for Taiwan’s cabinet, said in a statement.
Taiwan’s exports to the United States have increased in recent years, reflecting increased demand for Taiwanese electronics and advanced technology including semiconductors, the statement said. Mr. Lai, the president, said the Taiwanese government was concerned about the global impact of the tariffs.
The Taiwanese government “thought too optimistically about the relationship with Trump,” said Jason Hsu, a senior fellow at Hudson Institute and former member of Taiwan’s legislature for the opposition Nationalist Party. “It was a little bit too naïve thinking Trump would be nice to them, especially after the TSMC announcement.”
Chris Buckley contributed reporting from Taipei, Taiwan.
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Niraj Chokshi
April 3, 2025, 9:07 a.m. ET46 minutes ago
Niraj Chokshi
A prolonged global trade war could be devastating for the U.S. aerospace industry, which is an exemplar of U.S. manufacturing. The industry’s supply chains span the world and are highly specialized. Some parts are only available from a handful — in some cases single — suppliers. Big companies like Boeing may be shielded in the near-term because they have built up inventories of parts. But smaller U.S. suppliers that support them may be more vulnerable.
Ana Swanson
April 3, 2025, 9:05 a.m. ET48 minutes ago
Ana SwansonInternational trade reporter
The president has posted on social media, making apparent reference to the global tariffs. “THE OPERATION IS OVER!” he wrote. “THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE.”
Ana Swanson
April 3, 2025, 9:05 a.m. ET48 minutes ago
Ana SwansonInternational trade reporter
Trump seems to be alluding to his previous arguments that there will be a transition period for the economy as tariffs take effect and companies start to move factories to the United States. He has admitted that that period could be difficult — like a patient recovering from an operation.
Ana Swanson
April 3, 2025, 9:06 a.m. ET47 minutes ago
Ana SwansonInternational trade reporter
While the president is implying that there will be a quick recovery, many economists are more negative in their prognosis, saying that these tariffs will lead some factories to move to the U.S. but will also raise prices, slow growth and end up hurting the economy.
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Alexandra Stevenson
April 3, 2025, 8:54 a.m. ET58 minutes ago
Alexandra StevensonReporting from Hong Kong
Southeast Asia’s role as an alternative to China might be over.
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Two female factory workers hold up a yellow pieces of fabric.
A garment factory in Vietnam. The Trump administration slapped steep tariffs on the country that could have lasting effects on global trade.Credit...Linh Pham for The New York Times
For years, countries like Vietnam, Cambodia and Thailand have worked to turn themselves into alternatives to China for factories making the bags, electronics, shoes and auto parts that eventually end up in the United States.
That is now poised to change after President Trump on Wednesday aimed his most punishing tariffs at countries in Southeast Asia.
The news came as a hammer blow to American companies that have come to depend on factories in the region amid growing U.S.-China trade tensions. Some were asking: Where to now?
“This is much worse than what most of us had anticipated,” said Sonal Varma, chief economist for Asia excluding Japan at Nomura, the Japanese bank.
There were no illusions that any one country in Southeast Asia would be spared, but the size of the tariffs was a shock, as many of these countries are trade partners and allies with the United States.
Vietnam and Cambodia were singled out with new tariffs of 46 percent and 49 percent — among the steepest meted out to any country in the world, not accounting for earlier tariffs on specific sectors and countries such as China. In Thailand and Indonesia, the tariffs were high too, at 36 percent and 32 percent.
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Motorbikes and small vehicles drive around a giant durian in the center of a roundabout in a Cambodian city.
Cambodia was hit with new tariffs of 49 percent, among the steepest meted out to any country in the world.Credit...Poras Chaudhary for The New York Times
Mr. Trump had not previously given much air to concerns about the region, unlike his lengthy tirades against countries like China and Mexico, said Priyanka Kishore, an economist in Singapore and the founder of Asia Decoded, a consulting firm. “And then bam, Southeast Asia gets hit really hard,” she said.
The tariffs on Vietnam were especially harsh and could have long lasting effects on global trade because of how important the country has become as a substitute to manufacturing in China. “I’m still wrapping my head around it,” said Ms. Kishore.
Together with Mexico, Vietnam has been the biggest beneficiary of shifting global supply chains in recent years, as companies moved their factories out of neighboring China because of rising costs and growing tensions between the U.S. and China. The boom sent Vietnam’s trade surplus with the United States ballooning to $123.5 billion in 2024, the third highest after China and Mexico.
Initially, much of that trade was from companies rerouting products from China into Vietnam before exporting them to the United States. But in recent years, more of that trade has been driven by products made in Vietnam, as companies built new factories in the country and tried to replicate much of the China supply chain.
The United States is Vietnam’s largest export market, accounting for more than 30 percent of its total exports, including consumer electronics, smartphones, garments and footwear and wood furniture. Around a third of U.S. footwear was made in the country last year, making it the largest exporter of shoes to the United States. Nike, the sportswear brand, produces about 50 percent of its footwear in Vietnam.
Vietnam’s prime minister, Pham Minh Chinh, held an emergency cabinet meeting with his top ministers on Thursday to discuss how to respond to the tariffs. Other government agencies convened to try to understand how the Trump administration tariffs were calculated and how they would be applied. Companies and business associations, many of which had anticipated a tariff of 10 percent, expressed hope that the government could still hold talks with the Trump administration to reduce the levy.
“I was horrified when I saw the tariff numbers on the chart,” said Hong Sun, chairman of a South Korean business association in Vietnam, whose members includes the consumer electronics companies Samsung and LG.
“We can only hope that the Vietnamese government can help us weather this tsunami,” he said.
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A group of factory workers in yellow shirts and blue aprons stand around a loom in a textile factory in Thailand.
A textile factory in Thailand. The government has encouraged exporters to “seek new potential markets” after the Trump administration imposed new tariffs on the country.Credit...Minzayar Oo for The New York Times
In Thailand, the government emphasized that it was ready to negotiate and “engage in dialogue” with Washington. But it also encouraged companies to “seek new potential markets” in the face of the 36 percent tariffs levied on goods going to the United States, its biggest export market.
For American business owners such as Patrick Soong, who helps U.S. companies to design and make their products in the region, the tariffs on Thursday create uncertainty. His clients make everything from luggage to camera accessories to medical devices.
Mr. Soong and his company, Allitra, spent months looking for alternatives to China for his clients after Mr. Trump was re-elected last November. But on Thursday he was already making plans to move some production out of Thailand and Vietnam.
Mr. Soong planned to visit new factories in the Philippines with the idea of potentially moving some manufacturing there. Mr. Trump imposed new tariffs of 17 percent on the Philippines, less than half the duty he placed on Thailand and nearly a third lower than on Vietnam.
“I was planning on moving more product to Thailand," said Mr. Soong.
“I was looking at it as a next bet,” he said. “That has been disrupted.”
Damien Cave and Tung Ngo contributed reporting from Ho Chi Minh City, and Muktita Suhartono and Sui-Lee Wee from Bangkok .
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Christopher Buckley
April 3, 2025, 8:53 a.m. ET59 minutes ago
Christopher BuckleyReporting from Taipei, Taiwan
President Lai Ching-te of Taiwan showed a rare moment of public discord with the United States over the Trump administration’s tariffs. “Overall, this ‘reciprocal tariff’ policy, which is calculated based on trade deficits, does not reasonably reflect the high complementarity and substantiveness of the trade structure between Taiwan and the United States,” Lai said in a written statement after meeting Taiwanese government officials about the tariffs.
Christopher Buckley
April 3, 2025, 8:57 a.m. ET55 minutes ago
Christopher BuckleyReporting from Taipei, Taiwan
“The trade deficit between Taiwan and the United States in recent years has mainly been due to our country’s industries cooperating with President Trump during his first term on technology controls and related policies,” Lai said. He said his government would support Taiwanese businesses and continue making “vigorous representations” to the Trump administration.
Ana Swanson
April 3, 2025, 8:34 a.m. ET1 hour ago
Ana SwansonInternational trade reporter
Some experts are questioning how durable Trump’s tariffs will be from a legal perspective. Inu Manak, a trade expert at the Council on Foreign Relations, said that it was “surprising” that Trump had chosen to rest his tariffs on the International Emergency Economic Powers Act. She said the tariffs he imposed against Canada, China and Mexico last month using that authority “really stretch the interpretation of that law.” She added: “This action takes it even further, using the false claim that the trade deficit is somehow reflective of trade barriers.”
Ana Swanson
April 3, 2025, 8:38 a.m. ET1 hour ago
Ana SwansonInternational trade reporter
It remains to be seen whether a group or company will bring a legal challenge against the tariffs, since they may face blowback from the Trump administration. But Manak says the fact that a handful of Republicans broke ranks yesterday to vote to terminate the emergency powers used to apply tariffs to Canada is “a sign that Trump is losing some support in his party, and that there is a chance that congressional action to rein in the president’s abuse of his trade authorities is possible.”
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Melissa Eddy
April 3, 2025, 8:32 a.m. ET1 hour ago
Melissa EddyReporting on the German economy
German automaker Mercedes-Benz has called for the United States and the European Union “to enter into a constructive dialogue and reach a fair negotiated solution that is in the interests of both sides,” stressing the role the company plays in the U.S. economy, where it directly employs about 11,000 people. While Mercedes produces some of its vehicles at its assembly plant in Alabama, it imports others to the U.S. from its factories in Europe.
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Credit...Shannon Stapleton/Reuters
The New York Times
April 3, 2025, 8:28 a.m. ET1 hour ago
The New York Times
Here’s what countries are saying about Trump’s tariffs.
Image
Britain’s Prime Minister Keir Starmer sits at a table at a meeting.
Britain’s Prime Minister Keir Starmer said that negotiations with the United States toward a trade deal would continue.Credit...Pool photo by Ben Stansall
Here is how some of the United States’ key trading partners responded on Thursday to President Trump’s stiff new tariffs:
China: The Commerce Ministry in Beijing vowed countermeasures against the sweeping new tariffs, which it described as “unilateral bullying.” The Trump administration hit Beijing with a new 34 percent duty that will be added to the levies that the president had already imposed since January. Mr. Trump also scrapped a loophole that has allowed many e-commerce companies, such as Shein and Temu, to send low-cost goods to the United States from China without having to pay taxes.
European Union: The European Commission president, Ursula von der Leyen, said the bloc would be united in its response, but did not specify what measures it would take. “If you take on one of us, you take on all of us,” she said. Mr. Trump imposed a 20 percent tariff on European Union goods.
Britain: Prime Minister Keir Starmer did not suggest that Britain would immediately retaliate, and said that negotiations toward a trade deal with the United States would continue. The Trump administration has imposed a 10 percent tariff on Britain, lower than the 20 percent tariff it levied on the European Union.
France: Prime Minister François Bayrou of France, an E.U. member, said that the tariffs were “a catastrophe for the economic world” and would also cause pain for the United States. France’s government spokeswoman, Sophie Primas, provided some detail about how the European Union could respond to the new tariffs. “We are also going to attack services,” which make up the bulk of the American economy, she said in an interview with French radio. That could include online services provided by Google, Apple, Facebook, Amazon and Microsoft, she added.
Germany: Finance Minister Jörg Kukies said he remained hopeful that Europe would be able to reach a deal with Washington, but added: “We do need a strong reaction.” He told the BBC, “It would be naïve to think that if we just sit there and let this happen, things will get better.” The tariffs on E.U. goods, especially on automotive parts, threaten Germany’s attempts to revive its stagnant economy, the largest in Europe.
India: The Commerce Ministry said it was “carefully examining the implications of the various measures” announced by the United States, after Mr. Trump imposed 27 percent tariffs against it. Mr. Trump has long been irritated by the large U.S. trade deficit with India, despite his close relationship with Prime Minister Narendra Modi.
Japan: Prime Minister Shigeru Ishiba called the tariffs “extremely regrettable,” but refrained from talk of retaliation. He said that his government was trying to impress upon the Trump administration that Japan is helping the United States to re-industrialize as its largest overseas investor.
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Patricia Cohen
April 3, 2025, 8:05 a.m. ET2 hours ago
Patricia CohenGlobal economics correspondent
“Even the countries that are not facing high tariffs are going to be in trouble,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst. It will disrupt supply chains and inject a huge dose of uncertainty into the global economy, she said, “so you will get much lower investment, and lower economic activity, and lower employment.” She added: “It’s not a just a direct impact of a specific tariff against your country but it’s the overall impact of the chaos it’s bringing about in the trading system.”
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Jenny Gross
April 3, 2025, 8:04 a.m. ET2 hours ago
Jenny GrossReporting from London
For European businesses, some of the most serious effects of the Trump administration’s tariffs may be indirect. If a flood of low-cost goods from China and elsewhere that had been bound for U.S. stores are redirected to Europe, European companies will struggle to compete. Ursula von der Leyen, the European Commission president, acknowledged this risk, saying that the European Union would be watching the indirect effects closely. “We cannot absorb global overcapacity nor will we accept dumping on our market,” she said.
Anatoly Kurmanaev
April 3, 2025, 7:44 a.m. ET2 hours ago
Anatoly Kurmanaev
Why did Trump spare Russia from new tariffs?
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Skyscrapers in Moscow. Trade between the two countries has dropped, but Russia still exported about $3 billion worth of goods to the United States last year. Credit...Maxim Shemetov/Reuters
When President Trump unveiled major new tariffs on Wednesday, one big economy that he did not target was Russia.
Treasury Secretary Scott Bessent told Fox News on Wednesday that Moscow was spared because sanctions imposed on the country after its full-scale invasion of Ukraine in 2022 mean that U.S.-Russian trade had effectively stopped. North Korea, Cuba and Belarus, which are also subject to tough sanctions, were also excluded from the new levies.
Trade data paints a more complicated picture. The value of U.S. trade with Russia has fallen to its lowest level in decades following the invasion. But last year, Russia still exported about $3 billion worth of goods to the United States, according to U.S. trade figures, mostly fertilizer and platinum.
That figure is significantly higher than the value of U.S. imports from some smaller countries that Mr. Trump targeted, such as Laos and Fiji, prompting questions about whether the White House’s decision to spare Russia was a strategic choice.
Mr. Trump recently threatened to impose tariffs on buyers of Russian oil, a trade that is the lifeline of the country’s war machine, if President Vladimir V. Putin did not cooperate with U.S. efforts to broker a cease-fire in Ukraine. Such tariffs would significantly complicate the country’s foreign trade.
Mr. Trump may be holding back new economic restrictions on Russia as leverage in the peace talks, said Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin and a former official at the Russian central bank.
“I think it’s a political decision,” Ms. Prokopenko said. “Trump does not want to escalate while his talks with Putin are ongoing.”
The idea that Mr. Trump is using tariffs as a geopolitical bargaining tool appears to be supported by his treatment of Iran, another target of his deal-making ambitions. He put Iran in the lowest tier of the new tariffs, 10 percent, which is lower than the rate imposed on Israel, a staunch U.S. ally.
The composition of Russia’s exports could have also played a role. Russia is the third largest foreign supplier of fertilizer to the United States, and the total amount of its fertilizer exports has increased over the past year.
Mr. Trump has been weighing how to protect American farmers, a key constituency, from the effects of his trade wars. Keeping the cost of fertilizer low could be part of that strategy.
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Eshe Nelson
April 3, 2025, 7:33 a.m. ET2 hours ago
Eshe NelsonReporting on business and economics
The scale of the tariffs has intensified concerns about damage to the global economy and made investors think the Federal Reserve will need to be more aggressive in cutting interest rates. Investors had been betting on three more quarter-point cuts this year, but the chances of a fourth have now increased, trading in financial markets implied.
Eshe Nelson
April 3, 2025, 7:35 a.m. ET2 hours ago
Eshe NelsonReporting on business and economics
For many central banks, the prospect of a global trade war has made it more difficult to calibrate the right level of interest rates because it makes the outlook for inflation more uncertain.
“This uncertainty means we need to be extremely prudent” when setting rates, said Luis de Guindos, vice president of the European Central Bank. An escalation in trade tensions could lead to higher import costs and higher inflation, or it could reduce demand for European exports, depress the economy and weaken inflation pressures, he said.
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Aritz Parra
April 3, 2025, 6:58 a.m. ET3 hours ago
Aritz Parra
Prime Minister Pedro Sánchez of Spain has challenged the Trump administration’s argument that the latest tariffs are “reciprocal,” questioning the figures the United States has cited on trade with the European Union. During a televised statement, Sánchez called the Trump administration’s move an effort to “collect money to try to mitigate the deficit caused by a questionable fiscal policy.” He asked Trump to reconsider and to negotiate a different outcome with the European Union and the rest of the world.
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CreditCredit...Spanish Government Pool, via Associated Press
Mujib Mashal
April 3, 2025, 6:49 a.m. ET3 hours ago
Mujib MashalReporting from New Delhi
India’s Commerce Ministry said it was “carefully examining the implications of the various measures” announced by the United States, after President Trump imposed 27 percent tariffs against the country. The value of India’s goods exports to the U.S. stood at over $87bn last year, compared to its imports of about $42bn, and President Trump has long been irritated by the U.S. deficit in the trade of goods with India, despite enjoying a close relationship with Prime Minister Narendra Modi.
Mujib Mashal
April 3, 2025, 6:50 a.m. ET3 hours ago
Mujib MashalReporting from New Delhi
The Commerce Ministry said it remained focused on doubling goods and services trade between U.S. and India to $500 billion by 2030 — a goal outlined by the two governments during Modi’s visit to the White House in February.
Liz Alderman
April 3, 2025, 6:47 a.m. ET3 hours ago
Liz AldermanReporting on European business
With one fifth of France’s exports to the United States related to aeronautics, Airbus, the world’s biggest aircraft maker, has been watching the tariff situation closely. A spokesman said the European aeronautics giant had “taken note of the announcements from the Trump administration” and was “assessing its impact.” The company may be partially shielded due to a large industrial presence in the United States, where it has an assembly plant in Alabama. But it also has manufacturing sites around Europe, as well as Canada, Mexico and China.
Melissa Eddy
April 3, 2025, 6:25 a.m. ET3 hours ago
Melissa EddyReporting on the German economy
Trump’s tariffs pose a new threat for Germany’s stagnant economy.
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The frame of a car is worked on by machines in a factory, with sparks flying.
Car making is Germany’s largest industry and the United States is the sector’s biggest export market.Credit...Laetitia Vancon for The New York Times
Germany had hoped that a new government would revive its stagnant economy, but President Trump’s sweeping new tariffs are stoking worries that the country will fall short of its 0.3 percent growth expectations this year.
Calling the tariffs “an attack on the rules of global trade which created prosperity around the world,” Olaf Scholz, Germany’s chancellor, stressed on Thursday that his country was counting on cooperation among the European Union members to defend their interests.
Mr. Scholz, whose government lost an election in February but is still operating in a caretaker capacity, is limited in his ability to act as the country awaits the formation of a new government, expected in the coming weeks. The timing couldn’t be worse for Germany, Europe’s largest economy, to respond to the tariffs without clear leadership.
Germany could be the hardest hit of all 27 members of the bloc, given the large amount of trade that Germany does with the United States. Last year, Germany exported goods worth 161.4 billion euros, or $178.4 billion, to the United States, according to the country’s federal statistics office.
Last month, Germany’s Parliament agreed to loosen the country’s restrictions on debt in an effort to juice the economy, which contracted for the past two years. The move allowed lawmakers to create a new infrastructure fund worth €500 billion (almost $550 billion), which restored some optimism to markets and businesses.
But economists at Morgan Stanley warned that the impact of the tariffs could threaten prospective growth sparked by the package and the possibility of increased spending on defense.
“We think the impacts on Germany are likely to be almost double those we estimate for the euro area,” they wrote in a research note, adding that tariffs could ”potentially offset” the growth prospects from the stimulus package.
The country remained hopeful that Europe would be able to reach a deal with Washington, said Jörg Kukies, Germany’s finance minister, who met with the U.S. Treasury secretary, Scott Bessent, and U.S. trade representatives in Washington last week. But he added that negotiations alone would not be enough.
“We do need a strong reaction,” Mr. Kukies told the BBC. “It would be naïve to think that if we just sit there and let this happen, things will get better.” He said that he believed Washington was expecting the European Union to respond, but called for it to be in “a measured and constructive way.”
Mr. Trump imposed a 20 percent tariff on European Union goods on Wednesday, and a 25 percent levy on cars and automotive parts. But the uncertainty created by Mr. Trump’s policies, which can be announced or rescinded on a moment’s notice with little explanation, made the situation even worse, said Monika Schnitzer, a professor of economics at the Ludwig-Maximilians University of Munich who is an adviser to the German government.
“Companies can adjust to tariffs, but not to threats that change by the hour,” she said. “That damages the economy.”
German carmakers were already bracing for the 25 percent tariffs that Mr. Trump announced last week and took effect on Thursday. Automaking is Germany’s largest industry, and the United States is its most important export destination.
Analysts at Bernstein, a financial research firm, have predicted that the new measures would cost Volkswagen, BMW and Mercedes-Benz, the country’s three leading automakers, $11 billion overall.
The German auto companies have assembly plants in the United States, but they will not be immune from the tariffs because most vehicles are assembled with parts that come from a patchwork of countries. In recent weeks, sales for BMW and Volkswagen have jumped in the United States, as consumers scrambled to get ahead of expected price increases caused by Mr. Trump’s new tariffs.
Calling the sweeping tariffs “a frontal attack on world trade,” Dirk Jandura, president of the German trade association BGA, urged the European Union to swiftly enact counter-tariffs in an effort to end the trade dispute.
Mr. Jandura also urged Germany’s export-dependent industries to rethink their business model. “This is also a wake-up call for us: We have to become more competitive ourselves,” Mr. Jandura said.
But German officials warned that the trade war would ultimately hurt Americans more than the targets of the tariffs. “For consumers in the U.S., the day will not be Liberation Day, but Inflation Day,” Robert Habeck, Germany’s economy minister, told reporters.
Steven Erlanger contributed reporting from Berlin.
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Liz Alderman
April 3, 2025, 6:01 a.m. ET4 hours ago
Liz AldermanReporting on European business
Denmark’s industry minister, Morten Bodskov, said the country was ready to “stand firm” in response to Trump’s tariffs, and that the European Union “is ready with responses that are proportional but also robust.” Denmark, which has been in Trump’s crosshairs because of his desire to take over Greenland, has “no wish” to escalate trade tensions, but will work to protect its businesses and workers, Bodskov said in a statement.
Daisuke Wakabayashi
River Akira Davis
April 3, 2025, 5:46 a.m. ET4 hours ago
Daisuke Wakabayashi and River Akira DavisDaisuke Wakabayashi reported from Seoul and River Akira Davis from Tokyo.
A shocked world weighs responses to Trump’s tariffs.
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An electronics store in Taipei, Taiwan, on Thursday.Credit...Ann Wang/Reuters
Laptop computers from Taiwan, wine from Italy, frozen shrimp from India, Nike sneakers from Vietnam and Irish butter.
These products are found in homes across the United States, a testament to America’s enduring role as a champion of free trade and its standing as the most lucrative market for goods from around the world.
They are now among the vast categories of goods subject to additional taxes after President Trump, on Wednesday, imposed universal tariffs on all U.S. trade partners as well as additional, heavier duties on 60 countries he deemed the “worst offenders” of unfair trade practices.
In a sharp shift away from decades of trade policy, Mr. Trump instituted a 10 percent base line duty on all goods imported into the United States. In addition, other nations will be charged a so-called reciprocal tariff at an even higher rate next week.
For the European Union and China, the two largest U.S. trading partners, the White House imposed tariffs of 20 percent and 34 percent. The additional levy on China will be added to a 20 percent tariff previously imposed by Mr. Trump.
Even close allies such as Japan and South Korea were not spared. Neither were countries like Australia and Brazil that buy more from America than they sell to it.
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President Trump standing behind a lectern holding an oversize list of countries and tariff numbers.
President Trump announcing tariffs at the White House on Wednesday.Credit...Haiyun Jiang for The New York Times
The announcement, which Mr. Trump had hailed as America’s “Liberation Day,” sent shock waves across the world and raised the specter of a global trade war. Stock markets tumbled on the news, as investors were surprised at the size and scope of the tariffs.
In less than three months, Mr. Trump has pronounced tariffs on Canada, Mexico and China along with import duties on steel, aluminum, cars and car parts. The executive order on Wednesday included exemptions for semiconductors, pharmaceuticals and lumber. But analysts think those are not reprieves; they are products next to be targeted.
Allies and adversaries are scrambling to make sense of Mr. Trump’s tariff barrage, which has lifted U.S. import duties to their highest levels in more than a century and showed no sign of relenting. Some threatened to retaliate. Others openly pressed for negotiations, while some quietly pushed for concessions through back channels.
China accused America of “unilateral bullying,” pledging to take “firm countermeasures to safeguard its own rights and interests.” South Korea convened an emergency task force and vowed to “pour all government resources to overcome a trade crisis.” In Brazil, the government of President Luiz Inácio Lula da Silva said it was evaluating retaliatory measures.
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Lawmakers in Brazil milling around the floor of a legislative building.
Brazil’s Congress approved legislation on Wednesday to empower the country’s president to retaliate.Credit...Evaristo Sa/Agence France-Presse — Getty Images
In an early morning address on Thursday, Ursula von der Leyen, president of the European Commission, said that the global economy will “massively suffer” from the tariffs. While urging negotiation, she said the bloc is preparing further countermeasures in addition to the retaliatory tariffs it had already prepared for the earlier tax on foreign steel and aluminum.
Asia was particularly hard hit by Mr. Trump’s plan. Vietnam, a beneficiary of companies moving production out of China during the first Trump presidency, got slapped with a 46 percent levy. Taiwan, Thailand and Indonesia were all dealt import duties of more than 30 percent. The White House put a 26 percent tariff on imports from India.
For decades, exports have served as a pathway to economic prosperity for developing Asian countries emerging from conflict, crisis or poverty. The latest tariffs punished countries like Taiwan and Japan that have succeeded in modernizing their economies through trade, and they also darkened the prospects for poorer nations like Cambodia and Bangladesh still looking to follow that route.
Cambodia, a producer of clothing and footwear, was hit with a 49 percent tariff. The United States is the country’s largest export market.
“As a small country, we just want to survive,” said Sok Eysan, a spokesman for Cambodia’s ruling Cambodian People’s Party.
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Employees of a textile factory wearing blue uniform shirts and head coverings working in front of sewing machines.
A Chinese-funded textile factory in Cambodia, which faces a 49 percent tariff.Credit...Yang Qiang/China News Service/VCG, via Getty Images
Mr. Trump has blamed the sale of inexpensive goods from these countries for the hollowing out of America’s manufacturing sector. But they have also helped to keep inflation at bay, lowering prices for U.S. consumers.
Sarang Shidore, director of the Global South program at the Quincy Institute for Responsible Statecraft in Washington, D.C., said the tariffs would hit several developing countries hardest, while encouraging much of the world to move more quickly toward an order without the United States at its center.
“When it comes to trade, we are very much in a multipolar world, and alternative markets exist. Though of course there will be pain and transaction costs in diversification,” he said.
Anthony Albanese, the prime minister of Australia, said his country would not respond with retaliatory tariffs, vowing Australia would not “join a race to the bottom that leads to higher prices and slower growth.”
In Japan, officials and trade experts were caught off guard by the size of the new tariff the country will face — 24 percent. It was particularly jarring given Japan’s average tariff on nonagricultural goods is among the lowest globally. Japan called the tariff “extremely regrettable” and vowed to continue seeking an exemption.
Prime Minister Shigeru Ishiba has pledged to increase Japanese investment to roughly $1 trillion, focusing on purchasing more U.S. products like liquefied natural gas.
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A large round vat with pipes leading into it at a distillery.
A distillery in Yamazaki, Japan, for Suntory, whose chief executive said he believes Japan will be able to lower tariffs in negotiations with the Trump administration.Credit...Richard A. Brooks/Agence France-Presse — Getty Images
Speaking before the latest tariffs were announced, Takeshi Niinami, chief executive of Suntory Holdings, a Japanese beverage giant known for premium whiskey brands, said he believed the tariffs could be negotiated down because Japan is the biggest foreign investor in the United States.
“A period of chaos may ensue,” he said. “But ultimately, the situation will stabilize.”
Exiger, a data analytics firm, calculated that Trump’s announcements would result in $600 billion of new U.S. tariffs per year. The bulk of the levy would come from 10 countries, with Chinese exports accounting for a quarter of the additional tariffs at $149 billion. Vietnamese goods would face $63 billion, Taiwanese products $37 billion, and Japanese exports $36 billion in tariffs. German and Irish goods combined would face $41 billion in additional levies.
During the first Trump presidency, tech companies moved some production to Vietnam to protect against a possible trade war with China. One-third of Vietnam’s exports are now electronics.
Apple moved manufacturing of AirPods, watches and iPads over the last several years to Vietnam. It also shifted some iPhone production to India, after years of relying solely on Chinese factories.
South Korean conglomerate Samsung Electronics has invested more than $20 billion in Vietnam since it started opening factories there nearly two decades ago. It now produces more goods in Vietnam than China. Last year, it produced roughly $70 billion worth of goods at its Vietnamese factories, most of it for export.
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People at a factory complex, some standing and some on motorbikes.
An electronics factory in Hai Phong, Vietnam.Credit...Linh Pham for The New York Times
Mr. Trump’s policies are also complicating decisions for smaller American businesses. Brenden McMorrow, co-founder of Move2Play, a toymaker based in Torrance, Calif., said the company built all of its products in China since it started about nine years ago. But it began to consider factories in Vietnam or India to protect against Chinese import tariffs.
In Vietnam, it found that the factories run by Chinese companies using materials from China were not much cheaper. Instead, it decided to try a test run of manufacturing one of its toys in India — a decision that Mr. McMorrow said looks better with the lofty tariff imposed on Vietnam. It studied whether it could manufacture in the United States, but he said that the costs were roughly five times higher than in China.
And despite the higher cost of tariffs, he doesn’t see U.S. production as any more viable now.
“I don’t think it really makes sense to invest in trying to do a lot of this manufacturing in the U.S. If the next president comes in and just reverses course on all these tariffs, then you’re going to be in a terrible spot,” he said. “It makes more sense to just kind of stick to where we’re currently manufacturing and not make big risky moves.”
Damien Cave, Jack Nicas, Victoria Kim, Alex Travelli, Choe Sang-Hun, Sui-Lee Wee and David Pierson contributed reporting.
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Liz Alderman
April 3, 2025, 5:43 a.m. ET4 hours ago
Liz AldermanReporting on European business
Trump’s decision to put a 32 percent tariff on Switzerland stunned politicians and business leaders in the Alpine country. Switzerland has an open trade policy and recently abolished all industrial tariffs, including on goods from the United States, which is also its largest export market.
Liz Alderman
April 3, 2025, 5:43 a.m. ET4 hours ago
Liz AldermanReporting on European business
EconomieSuisse, Switzerland’s main business lobby, denounced the tariff as “unfair,” and said it was “excessively high” compared to a 20 percent levy on the European Union and 10 percent for the U.K.. The tax will deal “a severe blow” to the Swiss economy, the group said.
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Eshe Nelson
April 3, 2025, 5:30 a.m. ET4 hours ago
Eshe NelsonReporting on business and economics
European stock markets have followed Asian indexes lower. The Stoxx Europe 600 was down 1.2 percent in morning trading, with shares in most sectors, including banks, technology and consumer goods, falling.
Eshe Nelson
April 3, 2025, 5:30 a.m. ET4 hours ago
Eshe NelsonReporting on business and economics
Among the hardest hit European stocks were retail brands after Trump imposed steep tariffs on major shoe- and clothing-producing countries, such as Vietnam and Indonesia. Shares in Adidas and Puma tumbling more than 9 percent. Pandora, a Danish jewellery company that makes products in Thailand, was the worst performer in the Stoxx Europe 600, plunging 13 percent.
Stanley Reed
April 3, 2025, 5:19 a.m. ET5 hours ago
Stanley ReedReporting on energy
Although President Trump held off on imposing tariffs on oil and natural gas, prices for these commodities still fell sharply today. Brent crude, the international oil benchmark, dropped by 3 percent on Thursday. European natural gas futures also fell, by about 2.5 percent.
Stanley Reed
April 3, 2025, 5:19 a.m. ET5 hours ago
Stanley ReedReporting on energy
The reaction likely reflects fears that the tariffs will apply brakes to the world economy. Demand for oil is closely related to economic growth. And Trump has focused much of his tariff fire on Asia, which has been the main growth market for oil in recent years. In a note to clients on Thursday, analysts at Citigroup said that the tariffs were “much worse than expected.”
Mark Landler
Eshe Nelson
April 3, 2025, 5:11 a.m. ET5 hours ago
Mark Landler and Eshe NelsonReporting from London
Despite a charm offensive, Britain gets hit with a 10 percent tariff.
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Keir Starmer in the Oval Office, with his hand on the shoulder of President Trump, who is opening a letter.
Prime Minister Keir Starmer of Britain gave President Trump a state visit invitation from King Charles in the Oval Office in February.Credit...Doug Mills/The New York Times
After all that — the chummy Oval Office meeting, the extraordinary royal invitation, the paeans to the “special relationship” — Britain and its solicitous prime minister, Keir Starmer, still got swept into President Trump’s tariffs, along with the European Union and other major American trading partners.
Mr. Trump imposed his basic tariff of 10 percent on Britain, while hitting the European Union with 20 percent. That drew sighs of relief from Mr. Starmer’s aides, who said the difference would protect thousands of British jobs. They claimed vindication for Mr. Starmer’s charm offensive toward the American president; others said it was a dividend of Britain’s decision to leave the European Union in 2016.
Yet in another sense, it was a Pyrrhic victory: Britain was subject to the same blanket tariff as dozens of countries, even though the United States runs a trade surplus with Britain, according to U.S. statistics.
Britain clearly hopes to strike some kind of trade deal with Mr. Trump down the road, which could spare it the tariffs’ lasting effect. On Thursday, Mr. Starmer told business executives that the British would react with “cool and calm heads.”
The question is whether he will stick to his strategy — resisting pressure to impose retaliatory tariffs, for example — or fall into line with other countries, like Canada, in striking back against the United States. Downing Street said it would not impose tit-for-tat measures while trade talks were underway.
“His strategy up till now has been perfectly understandable,” said Jonathan Portes, a professor of economics and public policy at King’s College London. “If I were him, I would have done the same. Now he needs to avoid confrontation for the sake of it, but there’s no point in appeasement either.”
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A red double-decker bus driving through London.
Britain was subject to the same blanket tariff as dozens of countries, even though the United States runs a trade surplus with Britain, according to U.S. statistics.Credit...Kirsty Wigglesworth/Associated Press
Professor Portes said targeted retaliatory moves might make sense as a negotiating tactic. But an across-the-board tariff on American goods, he said, would only deepen the damage to Britain’s economy, which was sputtering even before Mr. Trump announced his measures on Wednesday.
Britain has bargaining chips at its disposal, including reducing an existing 2 percent tax on digital services. Professor Portes said Britain could play hardball in other ways — for example, acting against X, the social media platform owned by Elon Musk, Mr. Trump’s ally. Critics have accused the platform of fomenting hate speech, while Mr. Musk has used X to campaign against Mr. Starmer’s government.
If Mr. Starmer fails to extract anything more from Mr. Trump after all his efforts, it could embarrass him politically. But analysts said the bigger threat was the impact on Britain’s slow-growing economy. The Office for Budget Responsibility, an independent fiscal watchdog, said tit-for-tat 20 percent tariffs could shrink the British economy by 1 percent next year. It had forecast growth of 1.9 percent.
Britain’s finances are already under extreme pressure. The chancellor of the Exchequer, Rachel Reeves, increased taxes on employers and is planning large welfare cuts to cover spending on depleted services and to meet her promise to balance the budget and get debt levels down.
Britain, with its small, open economy, is deeply vulnerable to the effects of a trade war. British officials, led by the ambassador to Washington, Peter Mandelson, have negotiated energetically with the White House to avert these tariffs. They did not retaliate against previous tariffs on steel and aluminum, or on vehicles, which came into effect Thursday.
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Peter Mandelson speaking into a microphone and flanked by British and American flags.
Britain’s ambassador to the United States, Peter Mandelson, during a welcome reception for Mr. Starmer at the ambassador’s residence in Washington in February.Credit...Pool photo by Carl Court
Jonathan Reynolds, the business and trade minister who has been involved in the talks, said the watchword was “pragmatism.” On Tuesday, he told the BBC that Britain was in the “best possible position of any country” to reverse tariffs.
Britain runs either an $89 billion trade surplus or a $14.5 billion deficit with the United States, depending on whether one cites British or American statistics. (The difference rests in part on how the two sides treat offshore financial centers like Jersey and Guernsey, which are crown dependencies.) Trade in goods, with which Mr. Trump is most fixated, is relatively in balance.
Among the British exporters facing upheaval is the luxury auto industry, as carmakers like Jaguar, Bentley, Rolls-Royce and Aston Martin do not have assembly plants in the United States. More than 40,000 British businesses exported goods to the United States in 2023, according to customs data.
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Workers in green boiler suits inspecting the frames of black cars on a production line.
Workers checking the paintwork on Range Rover bodies at Jaguar Land Rover’s factory in Solihull, England, in 2022. Among the British exporters facing upheaval is the luxury auto industry, as carmakers like Rolls-Royce and Aston Martin do not have assembly plants in the United States.Credit...Phil Noble/Reuters
Mr. Starmer faces a delicate calculation in deciding how to respond to Mr. Trump. Given the president’s unpopularity in Britain, analysts said Mr. Starmer and his Labour Party could reap a short-term benefit by retaliating.
“Standing up to Trump might suit what he’s been trying to do, which is make Labour the patriotic party,” said Steven Fielding, an emeritus professor of political history at the University of Nottingham.
It would also distance Labour from Reform U.K., an anti-immigrant party whose leader, Nigel Farage, has close ties to Mr. Trump. And it would allow Mr. Starmer to draw closer to the European Union, which is expected to impose its own countermeasures.
Responding to Mr. Trump “could be a short-term political gain,” Professor Fielding said, but for Mr. Starmer in the longer-term, “any kind of tariff war could damage the economy, which will hurt his prospects for re-election.”
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Nader Ibrahim
April 3, 2025, 5:10 a.m. ET5 hours ago
Nader Ibrahim
Bernd Lange, chair of the European Union Parliament’s International Trade Committee, called President Trump’s tariff announcement a “mess” and “unfair” to E.U. and American producers. “Trump called it ‘liberation day’; I call it ‘inflation day,’” he quipped.
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Eshe Nelson
April 3, 2025, 4:40 a.m. ET5 hours ago
Eshe NelsonReporting on business and economics
Prime Minister Keir Starmer of Britain said negotiations toward a trade deal with the U.S. would continue and did not suggest any immediate retaliation. The Trump administration imposed a 10 percent tariff on Britain, which the government has taken as a favorable sign, in comparison with the 20 percent tariff imposed on the European Union.
Liz Alderman
April 3, 2025, 4:21 a.m. ET6 hours ago
Liz AldermanReporting on European business
Prime Minister François Bayrou of France said that the tariffs were “a catastrophe for the economic world.” He added that while the levies would create “an immense difficulty for Europe,” they would also prove “catastrophic” for the United States.
Melissa Eddy
April 3, 2025, 4:21 a.m. ET6 hours ago
Melissa EddyReporting on the German economy
Germany had been hoping that a new government could help revive its stagnant economy, but economists fear the tariffs could dampen the modest growth of 0.3 percent predicted for this year. The country’s acting finance minister, Jörg Kukies, is calling on the European Union to react.
Melissa Eddy
April 3, 2025, 4:21 a.m. ET6 hours ago
Melissa EddyReporting on the German economy
Kukies said on Thursday that Germany remained hopeful that Europe might be able to reach a deal with Washington but that negotiations alone would not be enough.“We do need a strong reaction,” he told the BBC. “It would be naive to think that if we just sit there and let this happen, things will get better.”
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River Akira Davis
April 3, 2025, 4:05 a.m. ET6 hours ago
River Akira DavisReporting from Tokyo
Japan lacks a ‘viable option’ for retaliating to Trump’s tariffs.
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An electronic board showing Nikkei share average in Tokyo, Japan on Thursday.Credit...Kim Kyung-Hoon/Reuters
After being smacked with double-digit percentage tariffs by a key ally, Japan finds itself with few retaliatory options.
Since President Trump began threatening broad tariffs in January, Japan has pursued a conciliatory strategy, with Prime Minister Shigeru Ishiba pledging in February to boost U.S. investment to $1 trillion.
Up until the day before Mr. Trump’s tariff announcements on Wednesday, prominent business executives in Tokyo said they were hopeful Japan would be spared. Those hopes were dashed when Mr. Trump said U.S. imports from Japan would face a 24 percent tariff. Last week, he said that cars, Japan’s top export to the United States, would be subject to a 25 percent tax.
While other places affected by the U.S. tariffs — including the European Union, Canada and China — have declared their intentions to retaliate with their own taxes on American goods, Japanese officials have refrained from talking about a similar move.
That is in part because the state of Japan’s economy and the importance of its trade with the United States would make it difficult to do so, analysts say.
Over the past few years, inflation, largely driven by rising energy and food costs, has surged in Japan and strained its economy. Japan’s imports from the United States are largely commodities, including natural gas and agricultural products.
That is why imposing retaliatory tariffs on U.S. imports would be “self-defeating” and “simply not a viable option,” said Stefan Angrick, a senior economist at Moody’s Analytics in Tokyo. “The only remaining strategy is to shift the narrative and emphasize Japan’s willingness to import more commodities,” he said.
American officials, including Mr. Trump, have repeatedly raised concerns about Japan’s non-tariff trade barriers, specifically citing import restrictions on agricultural products like rice and automotive standards that they contend put American manufacturers at a disadvantage.
At a news conference on Thursday, Japan’s chief cabinet secretary, Yoshimasa Hayashi, declined to comment on what Japan would be willing to consider conceding in trade negotiations with the United States. Other officials, including the prime minister, refrained from talk of retaliation.
Japan’s standards for certifying automobiles for use in the country are based on those established by the United Nations, Mr. Hayashi said. He also said that he has explained to his counterparts in Washington the details and logic behind Japan’s rice-import policies.
“Despite this, it is extremely regrettable that the U.S. government has announced the recent reciprocal tariff measures mentioning rice,” Mr. Hayashi said. “In any case, Japan will continue to strongly urge the United States to review its measures.”
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Mujib Mashal
April 3, 2025, 3:46 a.m. ETApril 3, 2025
Mujib MashalReporting from New Delhi
The United States is Bangladesh’s largest export destination, with over $8 billion in exports last year, largely of garments. Officials in Bangladesh, which is trying to emerge from a political crisis that has choked its economy, said they were reviewing tariffs on products from the United States after the Trump administration levied a new 37% tariff on the country.
Liz Alderman
April 3, 2025, 3:40 a.m. ETApril 3, 2025
Liz AldermanReporting on European business
Prime Minister Giorgia Meloni of Italy said President Trump’s tariffs were “a measure that I consider wrong.” In a Facebook post, she said Europe would “do everything we can to work a deal with the United States, aiming to prevent a trade war that would inevitably weaken the West in favor of other global actors.”
Emma Bubola
April 3, 2025, 5:54 a.m. ET4 hours ago
Emma Bubola
Meloni cleared her schedule for the day to focus on the response to U.S. tariffs, her office said in a statement. President Trump’s announcement included a new 20 percent tariff on imports from the European Union.
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Choe Sang-Hun
April 3, 2025, 3:38 a.m. ETApril 3, 2025
Choe Sang-HunReporting from Seoul
South Korea is devising support measures to help its industries weather the new tariffs, the country’s industry minister, Ahn Duk-geun, said on Thursday. “We regret that the U.S. tariffs have become a reality, with their profound impact on global trade,” Ahn said during a meeting with business leaders.
Liz Alderman
April 3, 2025, 3:24 a.m. ETApril 3, 2025
Liz AldermanReporting on European business
The French wine and spirits industry is bracing for a possible 800 million euro hit to exports to the United States because of Trump’s tariffs, the French Federation of Wine and Spirits said in a statement. While Trump did not follow through on a threat to tax Champagne and other European alcohols by 200 percent, the new 20 percent tariffs “will have extremely serious consequences” including on American wine and spirits importers, wholesalers and retailers, it said.
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Credit...Charly Triballeau/Agence France-Presse — Getty Images
Liz Alderman
April 3, 2025, 3:22 a.m. ETApril 3, 2025
Liz AldermanReporting on European business
France’s government spokeswoman, Sophie Primas, provided some detail about how the European Union could respond to the new tariffs. “We are also going to attack services,” she said, including online services. Those could include Google, Apple, Facebook, Amazon and Microsoft, she said in an interview with French radio. The E.U.’s response could also include reviewing access of U.S. companies to procurement contracts in Europe, she said.
Qasim Nauman
April 3, 2025, 2:29 a.m. ETApril 3, 2025
Qasim NaumanReporting from Seoul
The countries facing U.S. tariffs on their exports will want to negotiate, but “these are the same people who have been ripping us off for all these years,” Commerce Secretary Howard Lutnick told Sean Hannity on Fox News on Wednesday night, echoing President Trump’s criticism of the United States’ trading partners.
Qasim Nauman
April 3, 2025, 2:29 a.m. ETApril 3, 2025
Qasim NaumanReporting from Seoul
The “European Union won’t take chicken from America. They won’t take lobsters from America. They hate our beef because our beef is beautiful and theirs is weak,” Lutnick said. He also cited India, Japan and South Korea as examples of countries that have treated the United States unfairly.
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Meaghan Tobin
April 3, 2025, 2:27 a.m. ETApril 3, 2025
Meaghan TobinReporting from Hong Kong
Taiwan’s government condemned the tariffs as unreasonable and said it would lodge a strong protest with the U.S. trade representative. Taiwan’s exports to the United States have increased in recent years, reflecting demand for the island’s electronics and advanced technology like semiconductors, Lee Hui-chih, a spokeswoman for Taiwan’s cabinet, said in a statement. The new tariffs “do not accurately reflect the actual situation of Taiwan-U.S. trade,” the statement said.
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Credit...Ann Wang/Reuters
Aurelien Breeden
April 3, 2025, 2:20 a.m. ETApril 3, 2025
Aurelien Breeden
Europe will continue to negotiate with the United States but is ready to use retaliatory measures if necessary, Sophie Primas, the French government spokeswoman, told RTL radio on Thursday morning. “We are ready for this trade war,” she said.
Aurelien Breeden
April 3, 2025, 2:20 a.m. ETApril 3, 2025
Aurelien Breeden
The office of President Emmanuel Macron of France said that he would meet with representatives of industries affected by the new tariffs later in the day.
Mujib Mashal
April 3, 2025, 2:09 a.m. ETApril 3, 2025
Mujib MashalReporting from New Delhi
India is one of the biggest global suppliers of generic medicines and vaccines, and its pharmaceutical industry sold nearly $9 billion of goods to the U.S. last year. Those products are exempt from the new tariff Trump levied on the country.
Image
Credit...Francis Mascarenhas/Reuters
Mujib Mashal
April 3, 2025, 2:13 a.m. ETApril 3, 2025
Mujib MashalReporting from New Delhi
The exemption came despite Trump’s complaints about drug exports hurting American pharma companies.
Martin Fackler
April 3, 2025, 2:04 a.m. ETApril 3, 2025
Martin FacklerReporting from Tokyo
Prime Minister Shigeru Ishiba of Japan called the tariffs “extremely regrettable”at a news conference. He once again refrained from talk of retaliation. Instead, he said, his government was trying to impress upon the Trump administration that Japan is helping the United States to re-industrialize as its largest overseas investor.
Mujib Mashal
April 3, 2025, 2:02 a.m. ETApril 3, 2025
Mujib MashalReporting from New Delhi
The small island nation of Sri Lanka faced one of the highest tariffs from Trump, 44 percent. The South Asian nation sends about $3 billion of exports to the United States, largely garments and gems. Its government was scrambling to assure people that the tariff jolt wouldn’t affect the slow recovery from an economic crash three years ago.
Image
Credit...Gabriela Bhaskar for The New York Times
Mujib Mashal
April 3, 2025, 2:02 a.m. ETApril 3, 2025
Mujib MashalReporting from New Delhi
“As a government, we take full responsibility for addressing it—thoughtfully, steadily, and with the people’s interest at heart,” Arun Hemachandra, the deputy foreign minister, said.
Pamodi Waravita
April 3, 2025, 2:34 a.m. ETApril 3, 2025
Pamodi WaravitaReporting from Colombo, Sri Lanka
The garment industry in Sri Lanka manufactures for some of the largest brands in the United States. Industry officials there are alarmed that the new tariffs will make it nearly impossible to compete in the garment manufacturing market.
“We will have to write our obituary notice — 44 percent is no joke,” said Tuli Cooray, a consultant with the Joint Apparel Association Forum of Sri Lanka, the industry’s apex body.
Somini Sengupta
April 3, 2025, 1:57 a.m. ETApril 3, 2025
Somini SenguptaInternational climate reporter
Climate change could complicate India’s tussle with President Trump over tariffs. The next three months are due to be unusually hot, the Indian meteorological department said this week, after what was the hottest February in over 100 years. That is very likely to affect wheat yields, which have dipped in recent years, in part because of rising temperatures.
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Credit...Atul Loke for The New York Times
Somini Sengupta
April 3, 2025, 1:58 a.m. ETApril 3, 2025
Somini SenguptaInternational climate reporter
Now comes pressure from the United States to lower import duties on grains, including wheat and corn. That is tricky for Indian officials. Hundreds of millions of Indians, with small plots of land, rely on agriculture to make a living — and government price support to protect them from fluctuating rates.
David Pierson
April 3, 2025, 12:49 a.m. ETApril 3, 2025
David Pierson
China assails Trump’s new tariffs and vows retaliation.
Image
A view from the front of a large cargo ship loaded with shipping containers as it sails near a port.
The Yangshan Port in Shanghai in February.Credit...The New York Times
China on Thursday vowed countermeasures against President Trump’s sweeping new tariffs, warning that there would be no winners in a trade war.
The tariffs are “based on subjective and unilateral assessments,” China’s commerce ministry said in a statement, describing them as “unilateral bullying.”
The tariffs imposed on Chinese imports by Mr. Trump during his second term have created a severe burden on companies importing from China. These are on top of the tariffs he placed on Chinese imports during his first term.
“There are no winners in a trade war,” the commerce ministry said, urging the United States to use dialogue for resolving trade issues.
The tariffs on China have likely dimmed hope of a meeting between the country’s top leader, Xi Jinping, and Mr. Trump, who has expressed interest in a summit.
Wang Yi, China’s top diplomat, told Russian state media this week that the United States needed to remove the tariffs imposed on China earlier this year before any talks could take place between the two countries.
“If the U.S. side keeps on pressuring and even blackmailing, China surely will be resolute in its countermeasures,” Mr. Wang said.
China imposed tariffs on American exports, such as agricultural products, in response to the two earlier rounds of U.S. tariffs. Beijing’s options this time could include more tariffs, restrictions on U.S. investment in China or export controls on rare earth minerals.
Choe Sang-Hun
April 3, 2025, 12:08 a.m. ETApril 3, 2025
Choe Sang-HunReporting from Seoul
In South Korea, the tariffs hit as the country is reeling under a political crisis that has left it without an elected leader. The Constitutional Court is set to rule on Friday on whether the impeached president, Yoon Suk Yeol, will return to office or whether the country will hold a new election in the coming months. “Trump is hitting the U.S. ally in its most vulnerable moment,” said Ahn Byong-jin, a professor of political science at Kyung Hee University in Seoul.
Ian Austen
April 3, 2025, 12:05 a.m. ETApril 3, 2025
Ian AustenReporting from Windsor, Ontario
A Stellantis Chrysler minivan and Dodge muscle car factory in Windsor, Ontario, is shutting down for two weeks, in part because of the new tariffs, according to the union representing workers at the factory. The shutdown begins on Monday, and the company said the tariffs were the primary factor in the decision, James Stewart, the president of Unifor Local 444 wrote in a letter to members.
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Credit...Ian Willms for The New York Times
Ian Austen
April 3, 2025, 12:09 a.m. ETApril 3, 2025
Ian AustenReporting from Windsor, Ontario
The shutdown is the largest in Canada related to the tariffs. The assembly plant is the largest employer in Windsor, which sits across a river from Detroit. It recently underwent a retooling. Stellantis did not immediately respond for requests for comment.
Ian Austen
April 3, 2025, 12:29 a.m. ETApril 3, 2025
Ian AustenReporting from Windsor, Ontario
Windsor is the automotive capital of Canada. In February, I wrote about how President Trump’s earlier tariffs set off anger and worry in the city.
Damien Cave
April 2, 2025, 11:53 p.m. ETApril 2, 2025
Damien CaveReporting from Ho Chi Minh City
Companies seeking to decouple from China now face a completely different landscape because of the wide range of tariff rates. In Asia, Malaysia, the Philippines and Singapore have a significant advantage over Vietnam, Cambodia and India. South American countries, such as Brazil and Argentina, also look more attractive now.
Jack Nicas
April 2, 2025, 11:35 p.m. ETApril 2, 2025
Jack NicasReporting from Rio de Janeiro
President Javier Milei of Argentina — who describes himself as a radical libertarian — spun the news that Argentina was hit with the 10 percent minimum tariff as a positive. “Friends will be friends,” he wrote on X, linking to the Queen song of the same name. He then shared posts that argued Argentina will now have an advantage over other countries hit with higher tariffs.
Jack Nicas
April 2, 2025, 11:35 p.m. ETApril 2, 2025
Jack NicasReporting from Rio de Janeiro
Milei has a good argument for being President Trump’s friend. He is headed to Florida to meet with Trump tomorrow at Mar-a-Lago, where they will both accept awards from a right-wing group. It is Milei’s 10th trip to the United States in 15 months as president, and on almost every one, he has met with Trump or Elon Musk.
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Credit...Carlos Barria/Reuters
Andrés R. Martínez
April 2, 2025, 11:22 p.m. ETApril 2, 2025
Andrés R. MartínezReporting from Seoul
Ursula von der Leyen, president of the European Commission, said the European Union is ready to respond to the tariffs. It’s just after 5 a.m. in Brussels, where she is speaking from, a sign of how seriously Europe is taking Trump's announcement.
April 2, 2025, 11:24 p.m. ETApril 2, 2025
Andrés R. MartínezReporting from Seoul
Von der Leyen said she agreed that changes need to be made to the global trade system, but that tariffs would not fix it. She said the bloc will be united in its response.
April 2, 2025, 9:53 p.m. ETApril 2, 2025
Tony RommAna Swanson and Lazaro Gamio
How did Trump arrive at his new tariff rates?
The White House formula for calculating its tariffs
Trade deficit
with China
Imports from
China
÷
$291.9 bil.
$433.8 bil.
Is equal to...
0.6728
or
67%
What U.S says
China charges
...That figure, then divided by 2 is...
34%
New “reciprocal”
tariff on China
Photo by Carlos Barria/Reuters; Diagram by Lazaro Gamio
As he unfurled his list of tariffs targeting most of America’s trading partners, President Trump repeatedly stressed that each nation’s rate was reciprocal — reflecting the barriers they had long erected to U.S. goods.
He said little about the methodology behind those calculations, but a possible answer emerged later on Wednesday. Each country’s new tariff rate appeared to be derived by:
Taking the trade deficit that America runs with that nation and dividing it by the exports that country sent into the United States.
Then, because Mr. Trump said he was being “kind,” the final tariff number was cut in half.
James Surowiecki, a financial writer and book author, first pointed out the trend in a post on X. His comment set off widespread speculation, given that Mr. Trump previously said each nation’s tariff rate would be “the combined rate of all their tariffs, non-monetary barriers and other forms of cheating.”
Those non-monetary barriers include a host of hard-to-quantify laws and other policies that Mr. Trump sees as the primary reason that the U.S. experiences such trade imbalances in the first place. (There are exceptions: Some nations face only a standard 10 percent minimum tariff starting this month.)
In an earlier briefing with reporters, White House officials said the figures were calculated by the Council of Economic Advisers using well-established methodologies. The official added the model was based on the concept that the trade deficit that we have with any given country is the sum of all the unfair trade practices and “cheating” that country has done.
The White House later clarified its methodology in this post. Though it uses some mathematical symbols that might be hard to parse, it confirms that the formula is essentially based on the U.S. trade deficit with a foreign country, divided by the country’s exports.
“It was always going to be a really difficult exercise to come up with a very precise reciprocal tariff rate,” said Emily Kilcrease, the director of the Energy, Economics and Security Program at the Center for a New American Security and a former deputy assistant U.S. trade representative.
“Given what seems to be their desire to get something out quickly, it appears what they’ve done is come up with an approximation that is consistent with their policy goals,” she said.
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April 2, 2025, 6:06 p.m. ETApril 2, 2025
Joe RennisonDanielle KayeRiver Akira Davis and Eshe NelsonJoe Rennison and Danielle Kaye reported from New York, River Akira Davis reported from Tokyo and Eshe Nelson from London.
A slump in global stocks shows the scale of the tariffs surprised some investors.
Percentage change since Jan. 17 in major stock indexes for each country: Germany’s DAX; China’s Shanghai SE Composite; the United Kingdom’s FTSE 100; Canada’s S&P/TSX Composite; the United States’ S&P 500; Japan’s Nikkei 225. Data as of 9:30 a.m. Eastern.Source: LSEG Data & Analytics
Markets around the world tumbled on Thursday after President Trump announced across-the-board tariffs on America’s main trading partners, including the European Union and Japan.
The S&P 500 plunged more than 3 percent at the open of trading, after Asian and European stock markets also fell steeply. The tech-heavy Nasdaq fell more than 4 percent.
The slide came after Mr. Trump announced on Wednesday a new 10 percent base line tariff on all imports as well as additional, country-specific taxes on goods from a host of other countries. Those included increasing total tariffs on Chinese imports to 54 percent, as well as 20 percent on goods coming from the European Union and 24 percent on Japanese imports.
The market reaction suggested that the scale of the tariffs on Wednesday had come as a surprise, and there was confusion about how the figures had been derived.
“The numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
The Trump administration had modified its estimates of the tariffs imposed on the United States to include adjustments for what it deemed currency manipulation or even other taxes, with analysts questioning the analytical basis for doing so.
“Trump is going to war with countries on this,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”
The value of the U.S. dollar against a basket of other major currencies dropped more than 2 percent, its worst day since late 2022.
Many major U.S. companies sank as trading began. Some of the worst hit were technology stocks: Shares in Apple were down more than 8 percent, Amazon was down more than 6 percent and shares in Nvidia dropped more than 5 percent.
Shares in consumer brands also slumped as the Trump administration imposed steep tariffs on countries that are manufacturing hubs for shoes and clothing, for example a 46 percent tariff on Vietnam and 32 percent on Indonesia. Nike’s shares dropped 13 percent.
In Europe, shares of Puma dropped about 12 percent and Adidas fell by more than 9 percent in Frankfurt. The stock of Pandora, a Danish jewelry company that makes its products in Thailand, tumbled 12 percent.
The Stoxx Europe 600 fell more than 2 percent on Thursday, with most sectors, including banks, technology and consumer goods, in the red. Shares in Maersk, the Danish shipping giant, fell 12 percent on fears of a global trade slowdown. Big European banks including HSBC, Commerzbank and Deutsche Bank dropped more than 4 percent.
In Asia, the stocks tumbled for a wide range of companies including technology and semiconductor giants, as well as major auto exporters. Shares of Japanese automaker Toyota fell more than 5 percent on Thursday, while South Korea’s Samsung Electronics fell close to 3 percent.
Investors flocked to government debt as a haven. The yield on the 10-year U.S. Treasury bond, which moves inversely to prices, fell to 4.03 percent, the lowest since October.
The prospect of weaker global economic growth also weighed on commodities. Oil prices slumped even further after the OPEC oil cartel and its allies accelerated plans to increase supply. Brent crude oil, the international benchmark, dropped more than 6 percent to around $70.20 a barrel.
Stock markets globally have been choppy in recent weeks, as investors have been whipsawed by the administration’s mixed messages on tariffs. Mr. Trump has previously announced, delayed, changed and ultimately imposed tariffs on Canada, Mexico, steel, aluminum, cars and auto parts.
The uncertainty around the tariff levels, and how long they might last, has made it difficult for investors, economists and policymakers to assess the potential ramifications for consumers, businesses and the broader economy.
The U.S. tariff rate on all imports is now around 22 percent, from 2.5 percent in 2024, said Olu Sonola, the head of U.S. economic research at Fitch Ratings. That rate was last seen around 1910, he said.
Through Wednesday, the S&P 500 had fallen 7.7 percent below its most recent peak in February. The Nasdaq Composite index, which is chock-full of the tech stocks, was down almost 13 percent since its peak in December.
Signs of worry have also been evident in the rapid rise in the price of gold. Investors have flocked to the precious metal, sending it 19 percent higher in the first three months of the year, its biggest quarterly rise since 1986. On Thursday, gold was trading at over $3,100 per troy ounce.
Although many investors worry about the inflationary effect of tariffs, falling bond yields and a declining U.S. dollar suggest that most are more worried about waning economic growth.
It has led investors to suggest that the Federal Reserve might need to cut interest rates more aggressively. Traders had been betting on three more quarter-point cuts this year, but the chances of a fourth have now increased, financial markets implied.
Some investors had hoped that the tariff announcement on Wednesday would cure some of the uncertainty in the financial markets. But few truly expected the news to be the end of Mr. Trump’s tariff talk and with it an end to the stock market volatility.
“Investors no longer see tariffs as a one-time event risk, but an always-present risk,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, adding that the current expectation in the market is for volatility to persist.
Feb. 1, 2025, 6:00 p.m. ETFeb. 1, 2025
Ana SwansonDanielle KayeLazaro GamioKarl Russell and June Kim
Here’s what to know about Trump’s tariffs.
New tariffs for select countries
Country
Newtariff
Share of
U.S. imports
Goods trade
balance
E.U.
+20%
18.5%
–$241 bil.
China
+34%
13.4%
–$292 bil.
Japan
+24%
4.5%
–$69 bil.
Vietnam
+46%
4.2%
–$123 bil.
South Korea
+26%
4.0%
–$66 bil.
Taiwan
+32%
3.6%
–$74 bil.
India
+27%
2.7%
–$46 bil.
Switzerland
+32%
1.9%
–$39 bil.
Thailand
+37%
1.9%
–$46 bil.
Malaysia
+24%
1.6%
–$25 bil.
Show 50 more rows +
Sources: White House, Observatory of Economic Complexity Notes: Trade balance and import share figures based on 2024 trade data.
President Trump is trying to rewire the global economic order with a flurry of tariffs on imported goods that he argues will revive U.S. manufacturing and generate revenue.
In a ceremony at the White House on Wednesday, Mr. Trump unveiled his most expansive tariffs to date. They included a 10 percent rate on all countries except Canada and Mexico, and double-digit rates on countries that administration officials said had treated the United States unfairly — much higher than most experts expected. The announcement came hours before tariffs on all foreign-made cars went into effect.
What are tariffs, and who pays for them?
A tariff is a government surcharge on products imported from other countries.
Understanding tariffs means understanding how manufacturing, trade and supply chains function — and how costs build along the way.
Tariffs are paid by the companies that import goods into a country. Countries like China, Mexico and Canada do not directly pay any money to the U.S. government.
The cost of the tariffs can be passed around depending on how companies and countries react.
Trade policy experts agree that American consumers will most likely bear the cost of the new U.S. tariffs, as they did in Mr. Trump’s first term. Retailers often increase prices, and manufacturers that use imported materials face higher costs. Imposing tariffs on imports can also drive up the value of the U.S. dollar, making American exports more expensive.
Tracking Trump’s Tariffs
Planned
In effect
Partly in effect
Paused
Jan. 20Feb.MarchApril
Mexico
Most goods
Canada
Most goods
China
All goods
World
Aluminum
World
Steel
World
Reciprocal
World
Cars
Note: Goods imported from Mexico and Canada covered under the USMCA trade pact received a temporary reprieve from new tariffs.
How have U.S. trading partners responded?
Mr. Trump’s strategy is upending decades of free trade agreements with America’s closest allies, and it has already prompted retaliation from major trading partners, rattled markets and upended diplomatic ties.
Canada has vowed to defend its workers, businesses and economy from new tariffs and threats from Mr. Trump.
In March, after U.S. steel and aluminum tariffs took effect, the Canadian government said that it would impose new retaliatory tariffs on $20 billion worth of U.S. imports. Those were imposed on top of the 25 percent tariffs that Canada had announced after an initial round of levies by Mr. Trump.
The European Union is poised to respond to Mr. Trump’s steel and aluminum tariffs with countermeasures. Although the bloc so far has concentrated on imposing higher tariffs on a wide variety of goods — whiskey, motorcycles and women’s clothing are among the products that could be affected — officials are also open to placing trade barriers on services, using a new trade weapon that was developed only in 2021 to target Big Tech and Wall Street.
China began imposing retaliatory tariffs in March on many farm products from the United States, for which China is the largest overseas market. They included 15 percent tariffs on U.S. imports of chicken, wheat, corn and cotton and 10 percent tariffs on other agricultural products.
“Trade wars and tariff wars all start with harming others and end with harming oneself; the United States should learn lessons and change its course,” said Mao Ning, a spokeswoman for the Chinese Ministry of Foreign Affairs.
Mexico made a major effort to fend off tariffs, sending more than two dozen accused cartel leaders to the United States to face criminal charges and dispatching troops to fentanyl laboratories and the U.S. border.
Britain and Australia have chosen not to retaliate. Prime Minister Keir Starmer of Britain is trying instead to sign a long-term trade deal with the United States. And Prime Minister Anthony Albanese of Australia said his country would not impose reciprocal tariffs because they would hurt domestic consumers.
What is Trump trying to accomplish?
Mr. Trump has described tariffs as an all-purpose tool. His administration has argued that:
The tariffs on Canada, Mexico and China are a cudgel to force America’s largest trading partners to crack down on the flow of drugs and migrants into the United States.
Pending levies on steel, aluminum and copper are a way to protect domestic industries that are important to defense, while those on cars will prop up a critical base of manufacturing.
A new system of “reciprocal” tariffs is a way to stop America from being “ripped off” by the rest of the world.
The president has also maintained that tariffs will rake in huge sums of revenue that the government can use to pay for tax cuts and spending and even to balance the federal budget. But economists point out that tariffs can actually reduce tax revenue if the economy shrinks because consumers spend less as imported goods get more expensive.
The Trump administration has given a mix of rationales for the tariffs on Canada and Mexico. Some Trump officials said they were intended to spur crackdowns on illicit drugs, specifically fentanyl.
Trade experts point out that tariffs cannot simultaneously achieve all of the goals that Mr. Trump has expressed. In fact, many of his aims contradict one another.
For instance, if Mr. Trump’s tariffs prod companies to make more of their products in the United States, American consumers will buy fewer imported goods. As a result, tariffs would generate less revenue for the government.
“All of these tariffs are internally inconsistent with each other,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics, a Washington think tank. “So what is the real priority? Because you can’t have all those things happen at once.”
How could tariffs affect consumer prices?
A chart showing which countries have the largest share of U.S. imports. Mexico, China and Canada are the three biggest.
Mexico
15.6%
Share of U.S. imports
2008-24
China
13.5%
Canada
12.6%
Japan
Germany
Vietnam
S. Korea
Taiwan
Italy
India
Ireland
U.K
’10
’15
’20
’24
Note: Countries with at least a 2 percent share in 2024, through November, are shown, accounting for about three-quarters of imports.Source: Census Dept.By Karl Russell
Mr. Trump’s tariffs target countries that are major suppliers of a wide variety of goods to the United States.
For American families, the very likely result is higher prices at grocery stores, car dealerships, electronics retailers and the pump. Fresh produce, much of which is imported from Mexico, is one of the first categories where shoppers might notice an uptick in prices. It could happen within a couple of weeks for Mexican avocados, tomatoes and strawberries, among other products.
Price increases are poised to hit liquor aisles, too, especially beer and tequila. In 2023, nearly three-quarters of U.S. agricultural imports from Mexico consisted of vegetables, fruit, beverages and distilled spirits, according to the U.S. Department of Agriculture.
It could take longer for prices to rise for durable goods, like cars, because of existing inventory, or if companies expect the tariffs to be temporary.
The Yale Budget Lab estimated that Mr. Trump’s new auto tariffs, which are scheduled to take effect on Thursday, would raise vehicle prices 13.5 percent on average, the equivalent of an additional $6,400 for the price of a standard new 2024 car. American households would pay $500 to $600 more as a result of the tariffs, the group estimated.
Mr. Trump has argued the price increases would be minimal compared with other economic benefits, and has repeated that sentiment. Over the weekend, the NBC News correspondent Kristen Welker asked the president whether he was concerned that tariffs could make cars more expensive. Mr. Trump replied that he “couldn’t care less.”
“If the prices on foreign cars go up, they’re going to buy American cars,” he said of consumers.
But the economic strain has begun to show, even before the full effect begins to appear in official data, and consumer anxiety is on the rise.
What does it mean to be American made?
What’s an Import?
National borders blur in vehicle production, with parts often sourced from around the world.
Imported from Mexico
Chevrolet Blazer
Mexico
Other
U.S./Can.
35%
34
31
Origin country of parts
Toyota RAV4
Imported from Canada
U.S./Canada
Other
70%
30
Assembled in the United States
Nissan Rogue
Japan
Other
U.S./Can.
45%
30
25
Source: The National Highway Traffic Safety Administration The New York Times
Nearly half of all vehicles sold in the United States are imported, as well as nearly 60 percent of the parts used in vehicles assembled in the United States.
That’s because over the past three decades, since the North American free trade zone was created in 1994, American and foreign-owned automakers have built supply chains that cross the borders of the United States, Canada and Mexico.
For example, the 2024 Chevrolet Blazer, a popular sport utility vehicle made by General Motors, is assembled at a plant in Mexico using engines and transmissions that are produced in the United States.
Nissan makes its Altima sedan in Tennessee and Mississippi; the turbocharged version of the car has a two-liter engine that comes from Japan, and a transmission made in a factory in Canada.
The tariffs, set to take effect on Thursday, apply both to finished cars and trucks that are shipped into the United States, and to imported parts that are assembled into cars at American auto plants.
The threat of tariffs has automakers fretting. “Let’s be real honest,” Ford Motor’s chief executive, Jim Farley, said at an investor conference in February. “Long term, a 25 percent tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen.”
Reporting was contributed by Andrew Duehren, Colby Smith, Ian Austen, Vjosa Isai, Annie Correal, Keith Bradsher and Alan Rappeport.
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More on Trump’s Tariffs
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Small Violin Parts, Big Problems: A family business in Ottawa that makes special shoulder rests for violins is imperiled by both Trump’s tariffs on Canada and potential Canadian retaliation.
Auto Sales Surged: Sales of cars picked up recently partly as buyers rushed to lock in deals before Trump’s 25 percent tariffs on cars and auto parts go into effect.
Tariffs and Chinese Factories: Trump’s policies are straining trade ties and, as one factory owner’s struggles show, are challenging a long-held truth in China about the centrality of the U.S. market.
A Global Trade War Game: Two dozen trade experts gathered recently to simulate how a global trade war would play out. The results were surprisingly optimistic.
A Royal Invite Didn’t Work: In spite of a prolonged charm offensive by Prime Minister Keir Starmer, Trump said that Britain would be hit with the universal base rate levied on all countries.
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