President Donald Trump announced sweeping tariffs on US trading partners on Wednesday, as world leaders prepared to impose retaliatory actions, setting the stage for possible trade wars that could upend the global economy.
The minimum 10 per cent tariffs on all imports were established through an executive order on what Mr Trump called “Liberation Day”, an event attended by supporters at the White House's Rose Garden.
He said the action will be imposed on “friend and foe alike” because, “in many cases, the friend is worse than the foe in terms of trade”.
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again,” Mr Trump said.
China and Vietnam were the targets of some of the harshest tariffs, at 34 per cent and 46 per cent. India will be hit with a 26 per cent tariff while the EU will receive a 20 per cent levy.
Pakistan (29 per cent) and Israel (17 per cent) were also on a list of more than a dozen countries hit by the reciprocal tariffs.
Mr Trump also announced a minimum baseline tariff of 10 per cent for remaining countries, with rates going even higher for countries deemed the “worst offenders”.
The baseline 10 per cent tariff will go into effect on April 5, a senior administration official told journalists, while the higher reciprocal rates would go into effect on April 9.
The President also bemoaned non-finance barriers, claiming those were more harmful to the US than monetary barriers.
“They manipulated their currency, subsidised their exports, stole our intellectual property, imposed exorbitant VAT taxes to disadvantage our products, adopted unfair rules and technical standards and created filthy pollution havens,” he said.
Mr Trump also announced a 25 per cent tariff on all foreign-made cars, which will go into effect at midnight on Wednesday.
“This is one of the most ambitious economic realignments the American people have ever seen,” a senior administration official said before Mr Trump's announcement. “The goal is to restore American greatness and prosperity for everyday American workers and their communities.”
After the announcement, Treasury Secretary Scott Bessent warned countries against responding with their own levies.
“I wouldn’t try to retaliate,” he told Bloomberg Television. “As long as you don’t retaliate, this is the high end of the number … As far as negotiations go, we’ll see.”
The Middle East has so far not been a focus of Mr Trump's tariff plans. Member states in the Gulf Co-operation Council apply a common external tariff of 5 per cent on most goods.
But in one exchange last month, Commerce Secretary Howard Lutnick accused Kuwait of not being thankful enough to the US after it had liberated the emirate from Iraq in 1991. Kuwait’s ambassador to the US, Sheikha Al Zain Al Sabah, met Mr Lutnick in Washington last week, assuring him that US taxpayers had no financial burden from the war to liberate Kuwait.
Countries in the region whose currencies are pegged to the US dollar could face stricter monetary policy, with the US Federal Reserve likely to keep interest rates elevated, which could also lead to smaller economic growth and investment.
Meanwhile, Mr Trump's aluminium and steel tariffs are expected to have a limited impact on Gulf exports.
Mr Trump has most of his tariff focus on America's three largest trading partners: Canada, Mexico and China. Together, they make up 38.7 per cent of total US trade, according to the Census Bureau.
However, those countries also make up a list of nations with whom the US has the highest goods trading deficits. At about $270 billion, the US has its largest goods trade deficit with China, followed by Mexico at $157.2 billion. Data from the US Commerce Department showed the US had a large trade deficit with the EU and India.
And in February, the US Trade Representative also listed a group of countries it is “particularly interested in” as part of a review on supposed unfair trading practices including Saudi Arabia, G20 countries and “economies that have the largest trade deficits in goods with the United States”.
While Mr Trump has argued his tariffs would improve US industrial competitiveness and reduce the nation's trade deficits, trading partners have responded by threatening to impose retaliatory tariffs of their own.
EU Commission President Ursula von der Leyen said the bloc has a strong plan to retaliate, while Canada and Mexico are preparing their own measures.
