On Thursday, global markets and businesses were in turmoil following the announcement of extensive tariffs by US President Donald Trump targeting major trade partners and struggling nations alike.
The newly implemented policies from Trump establish a baseline tariff of 10% on all goods entering the US, with maximum rates exceeding 50% for imports from certain countries. This significant shift marks the most considerable disruption of global trade norms since World War II. Trump emphasized that these tariffs are intended to combat decades of inequitable trade practices that have put the US at a disadvantage.
The 10% universal tariff will come into effect on April 5, while “reciprocal tariffs” targeted at specific nations will commence on April 9.
Among these measures, a substantial 20% tariff has been placed on goods imported from the European Union. Although Mexico and Canada were spared from Wednesday’s sudden shift, they remain subject to a 25% tariff that was imposed earlier this year.
The immediate fallout from the upheaval of longstanding US foreign and trade policy has been noticeable, as Asian markets plummeted on Thursday morning. Stay updated with our live business blog for the latest developments.
Below, we outline the individual responses from various countries to the new global economic landscape as they unfold.
China
China has faced severe repercussions from the newly imposed tariffs, which raise the total levy on Chinese imports to over 50%.
The Ministry of Commerce in China urged Washington to “immediately cancel” the tariffs, cautioning that they “threaten global economic growth” and would negatively impact US interests as well as international supply chains.
“There are no winners in a trade war, and protectionism has no way forward,” stated the ministry. In response, Beijing has pledged to implement countermeasures.
The US plans to levy a 34% tariff on Chinese goods, in addition to the previous 20% imposed earlier this year.
Wang Wen, dean of the Renmin University’s Chongyang Institute for Financial Studies, noted that China has adjusted to US tariffs over the last seven years. “However, these elevated tariffs have not diminished the bilateral trade volume between the US and China, nor have they reduced China’s trade surplus with the US… Most Chinese citizens believe that the US tariff war against China is ineffective.”
Wang speculated that potential Chinese counteractions could involve reciprocal tariffs, devaluing the yuan, and further limiting the export of certain rare earth elements to the US.
Furthermore, Trump has eliminated the “de minimus” loophole, which permitted duty-free import of goods valued under $800. Currently, more than 90% of packages entering the US utilize the de minimus regime, with around 60% originating from China. This exemption had facilitated substantial business growth for fast-fashion brands like Shein and Temu in the US. As the largest e-commerce company in the US, Shein contributed approximately $570 million to the US economy in 2023, as per Oxford Economics. However, the closure of this loophole, effective on May 2, poses a risk to its business model.
UK
The UK has been subjected to a 10% tariff under Trump’s new policies. Downing Street, expecting a higher rate of 20%, expressed relief for avoiding the increased charge, attributing their luck to Keir Starmer’s more conciliatory stance towards the Trump administration.
Despite this, the UK’s growth projections are likely to be revised downward, as the tariffs may lead to significant job losses and force the government into further spending cuts or tax increases in the autumn.
South Korea
Acting President Han Duck-soo of South Korea has pledged a comprehensive response as the fourth-largest economy in Asia grapples with the imposition of 25% tariffs on its exports to the US. Han convened senior officials for an emergency meeting to urgently address the crisis, as reported by Yonhap news agency.
“Given the dire circumstances with the impending reality of a global tariff war, the government must utilize all available resources to navigate through this trade challenge,” Han stated.
The automotive sector is anticipated to suffer significantly from the latest round of Trump’s trade war, with leading manufacturers like Hyundai and GM Korea likely to experience a decrease in US exports. Last year, South Korea exported $34.74 billion worth of automobiles to the US, constituting 49% of the country’s total global car exports, according to the Korea Herald.
Japan
Prime Minister Shigeru Ishiba remarked: “Japan is the country making the largest investment in the United States, so we question the reasoning behind applying uniform tariffs across all nations.”
Trade and Industry Minister Yoji Muto described the tariffs as “extremely regrettable” and noted that Tokyo is still trying to convince the Trump administration to reconsider. “I have stressed that the unilateral tariff measures imposed by the United States are deeply regrettable, and I have urged Washington once more not to implement them against Japan,” Muto told reporters.
Tokyo’s stock market reacted negatively, with the Nikkei Stock Average witnessing a sharp decline of 4% at one point, marking its lowest level in eight months. Market analyst Tony Sycamore from IG Australia commented, “We anticipate a tremendously challenging start for Asian equity markets this morning. Buckle up, everyone… uncharted waters lie ahead.”
Japanese auto manufacturers are also preparing for a decline in exports, with Goldman Sachs indicating that the tariffs will significantly impact Japanese automobile and auto parts producers, as vehicles make up over 30% of Japan’s exports to the US.
India
India was startled by the announcement of a 26% tariff on all Indian goods exported to the US. Trump had previously called India “very, very tough” regarding its own tariffs, labeling the 26% as a “discounted reciprocal tariff” due to the 52% tariffs imposed by India.
The commerce ministry is currently assessing the ramifications of these tariffs, with a senior government official stating, “It’s a mixed bag and not a setback for India.”
In recent weeks, the Indian government had put significant effort into negotiating tariff concessions. Among the sectors set to be impacted are electronics, valued at nearly $14 billion, and over $9 billion worth of gems and jewelry, as well as textiles and IT industries. However, it is noteworthy that pharmaceuticals, one of India’s primary export sectors, remain exempt from these new tariffs.
Currently, the US trade deficit with India stands at $46 billion, and Trump has made it clear that these tariffs will persist until this “threat” is addressed. Reports suggest that India is contemplating slashing tariffs on $23 billion worth of US imports, including gems, jewelry, pharmaceuticals, and auto parts, in an effort to appease Trump and alleviate the tariffs, although no trade agreements have been finalized yet.
Australia
Prime Minister Anthony Albanese remarked that while “no one has received a better deal” than Australia, the new tariff regime represents a hostile act against an ally.
Australia has comparatively received a lighter blow from the new Trump tariff regime, only incurring the 10% blanket tariff. However, Albanese criticized the move stating, “President Trump mentioned reciprocal tariffs; a true reciprocal tariff would be zero, not 10%.” He added that the administration’s tariffs lack rationale and contradict the foundation of the partnership between the two nations. “This is not the behavior of a friend.”
Albanese confirmed that his government would refrain from imposing retaliatory tariffs against the US, currently set at zero for both countries, and asserted that ultimately, American citizens will feel the impact of Trump’s tariffs.
Certain critical minerals produced in Australia, which are not available in the US, will be exempt from the new tariff regime.
New Zealand
On Thursday, Prime Minister Christopher Luxon commented that New Zealand has been relatively better off, facing only a 10% levy, but expressed that tariffs and trade conflicts are “not the way to proceed.”
“New Zealand exporters are facing approximately $900 million in tariffs, which will ultimately affect US consumers,” Luxon stated. “This will lead to higher prices for US consumers, increased inflation, and a slowdown in growth, thus putting significant pressure globally.”
Luxon expressed his intention to engage in discussions with US officials regarding their assertion that New Zealand imposes a 20% tariff on American imports. “We do not comprehend how that figure was computed,” he stated.
The US has become New Zealand’s fastest-growing export market, projected to be its second-largest in 2024, surpassing Australia while remaining behind China. New Zealand’s exports to the US exceeded NZ$9 billion ($5 billion) in 2024, driven primarily by meat, dairy, and wine. The new tariff could amount to a NZ$900 million financial consequence for New Zealand exporters.
Canada
Canada has been exempted from the recent tariffs but continues to grapple with 25% tariffs on steel, aluminum, and automobiles, which came into effect at midnight Eastern time. Prime Minister Mark Carney stated that he would “oppose these tariffs with countermeasures” and “build the strongest economy in the G7.”
Carney noted that Trump has “preserved several key elements of our relationship,” but also pointed out that the existing 25% tariffs imposed earlier, which Trump cited were to punish Canada for failing to curb the flow of fentanyl into the US, remain intact.
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers Association, remarked on social media that this outcome is akin to “dodging a bullet while stepping onto a tank’s path.”
Mexico
Similar to Canada, Mexico has been exempted from the latest tariffs but is still subject to previously enforced levies announced by Trump. President Claudia Sheinbaum stated on Wednesday that the country would not engage in a “tit-for-tat” approach regarding tariffs, but would instead announce a “comprehensive program” on Thursday.
Taiwan
Taiwan’s cabinet responded by labeling the tariffs as “very unreasonable” and expressed its intention to address the matter with the US government.
The 32% tariff announced by Trump against Taiwan is expected to severely impact the island’s economy, where over 60% of economic activity is derived from exports. Taiwan recorded a trade surplus of nearly $74 billion last year. Economists at Bloomberg predict a potential 3.8% contraction in GDP as a consequence of a substantial decline in exports to the US resulting from these tariffs.
Before the announcement, Taiwan’s President Lai Ching-te stated that Taiwan is an “indispensable” player in the global supply chain and that the government would safeguard the interests of Taiwanese companies.
The American Chamber of Commerce in Taiwan urged policymakers in both countries to “continue nurturing this mutually beneficial relationship.”
“Amid rising geopolitical complexities, the US-Taiwan partnership is not only a catalyst for shared economic prosperity but is also vital for supply chain security and regional stability,” it stated in an official announcement.
Taiwanese authorities have been contemplating responses to these specific tariffs for months, including evaluating the possibility of enhancing energy imports and reducing their own tariffs to balance bilateral trade, as indicated in reports last week.
In response to Trump’s earlier tariffs on the semiconductor industry, where Taiwan plays a dominant role, the government swiftly worked to appease the Trump administration. A $100 billion investment by Taiwan’s TSMC in the US—announced by TSMC’s chairman with Trump in the White House—seemingly secured an exemption for TSMC.
Thailand
The Thai government issued a statement indicating that the tariffs “will inevitably affect all trading partners, particularly impacting the purchasing power of American consumers, who might find it difficult to absorb the rapid price increases.”
It encouraged Thai exporters to “explore new potential markets to lessen reliance on a single market” and mentioned that it had prepared “mitigation measures” to assist exporters particularly vulnerable to the new tariffs.
Additionally, the statement reiterated: “The Thai government is keen to reaffirm that Thailand is ready to engage in dialogue with the United States at the earliest opportunity, aiming to achieve a fair trade balance that minimizes disruptions to both economies.”
