White House keeps world guessing as clock ticks down to Trump’s new tariffs
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President Donald Trump has launched tariff wars with nearly all of America’s trading partners. And there’s no end in sight.
Several sweeping new taxes on goods from other countries are already here, with more set to take effect as soon as Wednesday. Trump has promised higher rates for his latest and most severe volley of duties, which he calls “reciprocal” tariffs.
With so many back-and-forth tariff actions and threats, it can be tough to keep track of where things stand. Here’s a rundown of what you need to know.
What tariffs go into effect on Wednesday?
Trump announced his latest — and most sweeping — round of tariffs on April 2, which he dubbed “Liberation Day,” as part of his “reciprocal” trade plan. In a fiery speech claiming that other countries had “ripped off” the U.S. for years, Trump declared that the U.S. would now tax nearly all of America’s trading partners at a minimum of 10% — and impose steeper rates for countries that he says run trade surpluses with the U.S.
The 10% baseline already went into effect Saturday. And when the clock strikes midnight Wednesday, Trump’s higher import tax rates on dozens of countries and territories will take hold — that is, unless anything changes in the eleventh hour.
The steeper levies run as high as 50% — with that biggest rate landing on small economies that trade little with the U.S., including the African kingdom of Lesotho. Some other rates include a tax of 47% on imports from Madagascar, 46% on Vietnam, 32% on Taiwan, 25% on South Korea, 24% on Japan and 20% on the European Union.
Economists warn that the levies will raise prices for goods consumers buy each day — particularly as these new tariffs build on some of previous trade measures. Trump last week announced a tariff of 34% on China, for example, which would come on top of 20% levies he imposed on the country earlier this year.
Trump has since threatened to add an another 50% levy on Chinese goods in response to Beijing’s recently-promised retaliation. That would bring the combined total to 104% against China.
White House press secretary Karoline Leavitt said at a Tuesday briefing that Trump had not been considering an extension or delay for coming rate increases.
“He expects that these tariffs are going to go into effect,” she said.
Are more tariffs coming?
As part of a flurry of countermeasures, China has said it will levy its own 34% tariff on all U.S. goods — matching Trump’s rate — starting Thursday.
Trump was quick to criticize China’s move, but China has maintained that it will “fight to the end” and take countermeasures against the U.S. to protect itself. On Tuesday, China’s Commerce Ministry called Trump’s threat to escalate tariffs “a mistake on top of a mistake” that “once again exposes the blackmailing nature of the U.S.”
The trade war between the U.S. and China isn’t new. The two countries exchanged a series of tit-for-tat levies in recent months — on top of tariffs imposed during Trump’s first term, many of which were preserved or added to under former President Joe Biden.
While China has taken the toughest approach so far, several countries signaled that they are evaluating their own responses to Trump’s levies.
We may see more retaliation in the future, but others have signaled some hopes to negotiate. The head of the European Union’s executive commission is among those offering a mutual reduction of tariffs — while warning that counter measures are still an option.
Trump could also roll out more product-specific tariffs down the road. The president has previously threatened import taxes on goods like copper, lumber and pharmaceutical drugs — all of which are currently exempt from Trump’s “reciprocal” levies.
During a speech Tuesday night, Trump boasted he was offering “breaking news” before vowing, “We’re going to be announcing, very shortly, a major tariff on pharmaceuticals.” In the same remarks, the president lamented that the U.S. no longer produces many of the pharmaceuticals its citizens take, and said new tariffs would change that — bringing production of medication back to the U.S.
What other import taxes are already here?
A handful of tariffs are already in effect, including Trump’s 10% baseline tax on Saturday.
But before that sweeping levy, Trump had rolled out several other rounds of tariffs targeting particular countries and products. His 25% tariffs on auto imports began last Thursday, for example — kicking off with taxes on fully-imported cars. Those levies are set to expand to applicable auto parts in the following weeks, through May 3.
Canada responded on Tuesday with a 25% levy on auto imports from the U.S. that do not comply with the 2020 US-Mexico Canada Agreement. Those are slated to go into effect on the same day as Trump’s higher tariffs on Wednesday.
And Trump’s expanded steel and aluminum tariffs went into effect last month. Both metals are now taxed at 25% across the board, with Trump’s order to remove steel exemptions and raise aluminum’s levy from his previously-imposed 2018 import taxes taking effect March 12.
Beyond levies on China, Trump has also previously targeted Mexico and Canada. While Mexico and Canada were spared from last week’s heightened rates, Trump imposed — and later partially suspended — 25% duties on goods from both countries.
Meanwhile, goods complying with the USMCA can continue to enter the U.S. duty-free, according to the White House. Other imports are still levied at 25%, as well as a lower 10% duty on potash and Canadian energy products.
But once the two countries have satisfied Trump’s demands on immigration and drug trafficking, the White House said the tariff on non-USMCA compliant imports will drop from 25% to 12%.
President Donald Trump's "reciprocal" tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods, deepening his global trade war even as he prepared for negotiations with some nations.
Trump's punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply downward.
The S&P 500 has shed nearly $6 trillion in value since Trump unveiled the tariffs a week ago, the deepest four-day loss since the benchmark's creation in the 1950s. The index is now nearing a bear market, defined as 20% below its most recent high.
A sell-off across Asian markets resumed on Wednesday after a brief respite, with Japan's Nikkei(.N225) opening new tab down over 3% and South Korea's won currency sliding to a more than 16-year low.
U.S. stock futures also pointed to a fifth straight day of losses on Wall Street.
Trump has offered investors mixed signals about whether the tariffs will remain in the long term, describing them as "permanent" but also boasting that they are pressuring other leaders to ask for negotiations.
"We have a lot of countries coming in that want to make deals," he said at a White House event on Tuesday afternoon. He said at a later event that he expected China to pursue an agreement as well.
Trump's administration has scheduled talks with South Korea and Japan, two close allies and major trading partners, and Italian Prime Minister Giorgia Meloni is due to visit next week.
The deputy prime minister of Vietnam, the low-cost Asian manufacturing hub hit with some of the highest duties globally, is set to talk with Trump's Treasury Secretary Scott Bessent later on Wednesday.
The prospect of deals with other countries had pushed stock markets up earlier on Tuesday, but U.S. stocks had ceded their gains by the end of the trading day.
This map shows the percentage of reciprocal tariffs imposed by the U.S. administration on each economy.
CHINA VOWS FIGHT
Item 1 of 2 A drone view shows trucks as they transport cargo at the Bayport Container Terminal in Seabrook, Texas, U.S., April 7, 2025. REUTERS/Adrees Latif
[1/2]A drone view shows trucks as they transport cargo at the Bayport Container Terminal in Seabrook, Texas, U.S., April 7, 2025. REUTERS/Adrees Latif Purchase Licensing Rights, opens new tab
Trump nearly doubled duties on Chinese imports, which had been set at 54% last week, in response to counter-tariffs that Beijing announced last week. China has vowed to fight what it views as blackmail.
Top Chinese brokerages have pledged to work together to help steady domestic share prices in response to the tariff-induced turmoil.
Economists have warned that U.S. consumers are likely to face higher prices on everything from sneakers to wine as a result of the trade war.
The full effects of Wednesday's tariffs may not be felt for some time, as any goods already in transit as of midnight will be exempt from the new levies as long as they arrive in the U.S. by May 27.
Trump's earlier across-the-board 10% tariffs on all imports from many countries began on Saturday. The latest round of duties, which took effect at 12:01 a.m. ET (0401 GMT), are aimed at countries that are "ripping off" the U.S., according to Trump.
That list includes many of the United States' closest allies, including the European Union, which was hit with a 20% tariff.
Trump has said the tariffs are a response to barriers put on U.S. goods that have stymied American businesses. He has also accused countries, including Japan, of devaluing their currencies to gain a trade advantage, something Tokyo denies.
Japan's finance minister on Wednesday said trade negotiations with Washington could include foreign exchange rates.
Trump has signaled he may not be finished on tariffs.
In remarks to Republican lawmakers on Tuesday evening, he said he would soon announce "major" tariffs on pharmaceutical imports, one of a handful of categories of goods that have been exempted from the new taxes.
A table showing sectors of imported products and the corresponding estimated price increases that could result from Trump's sweeping tariffs, ranging from 10% for medical diagnostic equipment to 30% for computer parts and toys & video games.
By declaring a trade war on the rest of the world, President Donald Trump has panicked global financial markets, raised the risk of a recession, and broken the political and economic alliances that made much of the world stable for business after World War II.
Trump’s latest round of tariffs went into full effect at midnight Wednesday, with higher import tax rates on dozens of countries and territories taking hold.
Economists are puzzled to see Trump trying to overhaul the existing economic order and doing it so soon after inheriting the strongest economy in the world. Many of the trading partners he accuses of ripping off U.S. businesses and workers were already floundering.
“There is a deep irony in Trump claiming unfair treatment of the American economy at a time when it was growing robustly while every other major economy had stalled or was losing growth momentum,” said Eswar Prasad, professor of trade policy at Cornell University. “In an even greater irony, the Trump tariffs are likely to end America’s remarkable run of success and crash the economy, job growth, and financial markets.’’
Trump and his trade advisers insist that the rules governing global commerce put the United States at a distinct disadvantage. But mainstream economists — whose views Trump and his advisers disdain — say the president has a warped idea of world trade, especially a preoccupation with trade deficits, which they say do nothing to impede growth.
The administration accuses other countries of erecting unfair trade barriers to keep out American exports and using underhanded tactics to promote their own. In Trump’s telling, his tariffs are a long-overdue reckoning: The U.S. is the victim of an economic mugging by Europe, China, Mexico, Japan, and even Canada.
Some countries indeed charge higher taxes on imports than the United States does. Some manipulate their currencies lower to ensure that their goods are price-competitive in international markets. Some governments lavish their industries with subsidies to give them an edge.
However, the United States is still the second-largest exporter in the world, after China. The U.S. exported $3.1 trillion of goods and services in 2023, far ahead of third-place Germany at $2 trillion.
The fear that Trump’s remedies are deadlier than the maladies he’s trying to cure has sent investors fleeing American stocks. Since Trump announced sweeping import taxes on April 2, the S&P 500 has cratered 12%.
Despite high trade deficits, the US economy is strong
Trump and his advisers point to America’s lopsided trade numbers — year after year of huge deficits — as proof of foreigners’ perfidy. He’s seeking to restore justice and millions of long-gone U.S. factory jobs by taxing imports at rates not seen in America since the days of the horse and buggy.
“They’ve taken so much of our wealth away from us,” the president declared last week at a White House Rose Garden ceremony to celebrate the tariffs announcement. “We’re not going to let that happen. We truly can be very wealthy. We can be so much wealthier than any country.’’
But the U.S. is already the wealthiest major economy in the world. And the International Monetary Fund in January forecast that the United States would outgrow every other major advanced economy this year.
China and India did grow faster than the United States over the past decade, but their living standards still don’t come close to those in the U.S.
Manufacturing in the U.S. has been fading for decades. There is widespread agreement that many American manufacturers couldn’t compete with an influx of cheap imports after China joined the World Trade Organization in 2001. Factories closed, workers were laid off, and heartland communities withered.
Four years later, nearly 3 million manufacturing jobs had been lost, though robots and other forms of automation probably did at least as much to reduce factory jobs as the “China shock.’’
Tariffs are Trump’s all-purpose weapon
To turn around this long decline, Trump has repeatedly unsheathed the tariffs that are his weapon of choice. Since returning to the White House in January, he’s plastered 25% taxes on foreign cars, steel and aluminum. He’s hit Chinese imports with 20% levies, on top of hefty tariffs he imposed on China during his first term.
On Wednesday, he blasted his big bazooka: 10% “baseline’’ tariffs on just about everybody and “reciprocal’’ tariffs on everyone else that the Trump team identified as bad actors, including tiny Lesotho (a 50% import tax) and China (34% before adding earlier levies).
Trump views tariffs as an all-purpose economic fix that will protect American industries, encourage companies to open factories in America, raise money for the U.S. Treasury, and give him leverage to bend other countries to his will, even on issues that have nothing to do with trade, such as drug trafficking and immigration.
The president also sees a smoking gun: The United States has bought more from other countries than it has sold them every year for the past half-century. In 2024, the U.S. trade deficit in goods and services came to a whopping $918 billion, the second-highest amount on record.
Trump trade adviser Peter Navarro calls America’s trade deficits “the sum of all cheating’’ by other countries.
However, economists say trade deficits aren’t a sign of national weakness. The U.S. economy has nearly quadrupled in size, adjusted for inflation, during that half-century of trade deficits.
“There is no reason to think that a bigger trade deficit means lower growth,” said former IMF chief economist Maurice Obstfeld, senior fellow at the Peterson Institute of International Economics and an economist at the University of California, Berkeley. “In fact, the opposite is closer to the truth in many countries.”
A trade deficit, Obstfeld said, does not mean a country is losing through trade or being “ripped off.”
Spend a lot, save a little, and see trade deficits swell
The faster the U.S. economy grows, in fact, the more imports Americans tend to buy and the wider the trade deficit tends to get. The U.S. trade deficit — the gap between what it sells and what it buys from foreign countries — hit a record $945 billion in 2022 as the American economy roared back from COVID-19 lockdowns. Trade deficits typically fall sharply in recessions.
Nor are trade deficits primarily inflicted on America by other countries’ unfair trading practices. To economists, they’re a homegrown product, the result of Americans’ propensity to save little and consume more than they produce.
American shoppers’ famous appetite for spending more than the country makes means that a chunk of the spending is used for imports. If the United States boosted its savings — for example, by reducing its budget deficits — then that would reduce its trade deficit as well, economists say.
“It’s not like the rest of the world has been ripping us off for decades,” said Jay Bryson, chief economist at Wells Fargo. “It’s because we don’t save enough.”
The flip side of America’s low savings and big trade deficits is a steady inflow of foreign investment as other countries sink their export earnings into the United States. Direct foreign investment into the U.S. came to $349 billion in 2023, the World Bank reported, nearly double No. 2 Singapore’s inflows.
The only scenario in which tariffs reduce the U.S. deficit is if they cause investment in the U.S. to crash, said Barry Eichengreen, an economist at the University of California, Berkeley. That “would be a disaster.’’
Harvard University economist Dani Rodrik said a “well-designed industrial policy” supported by select tariffs might have fostered increased investment and capacity in manufacturing.”
Instead, Rodrik said, Trump’s actions just “throw up a lot of uncertainty” and alienate America’s best allies, making for “a terrible policy all in all.’’
China’s exports will be squashed by Donald Trump’s tariffs, regardless of whether the U.S. president hits them with an extra 50% levy as he threatened on Monday. The problem for Beijing is that consumers in the People's Republic will need a lot more government support to absorb some of the slack.
A chart showing Chinese exports to the United States over the past decade
The Asian behemoth's annual exports to the U.S. are worth $525 billion and China produces about 30% of the world’s manufactured goods, per the World Bank. Yet it only accounts for 13% of global consumption as of 2023. The imbalance endures despite pledges by party officials to restructure, opens new tab the economy away from an investment-led growth model.
Now Beijing's strategic response to the U.S. assault could add pressure: To support the positioning of itself as a defender of global trade, the People’s Republic may act quickly to lower its trade barriers with non-U.S. economies. That would send a message that China doesn't intend to flood the world with more subsidised stuff like steel, batteries and solar panels. Such opening up also could support deeper trade ties with the European Union and force further industrial upgrade.
Holding back on exports, which contribute about 20% of Chinese GDP, will increase the domestic pain President Xi Jinping needs to address. His administration has been preparing for the challenge, emphasising the need to boost demand in its $18 trillion economy in recent policy meetings.
The latest situation calls for more aggressive fiscal policies. UBS analysts expect Beijing may need to increase broad spending by 1.5% of GDP, or $270 billion, to achieve economic growth of 4% in 2025, below China's official 5% target. But the fiscal space is limited. Ratings agency Fitch downgraded China's sovereign credit rating last week, citing concerns that explicit Chinese debt can rise to 74.2% of GDP in 2026 from 60.9% last year.
There are other things China can do: Beijing has pledged to take on a "moderately loose" monetary policy for the first time in 14 years. The state-run People's Daily also suggested in a front-page editorial on Monday that the central bank may lower interest rates to boost demand.
Of course, turning conservative savers into enthusiastic spenders will be challenging, especially while China's property market is still finding a bottom. Still, it is probably just as hard, if not harder, for the U.S. to remake itself as an industrial manufacturing powerhouse.
China said it will never accept the "blackmail nature" of the United States after President Donald Trump escalated tariff threats, the Chinese commerce Ministry said on April 8.
Trump said on April 7 that he will impose an additional 50% tariff on China if Beijing does not withdraw its retaliatory tariffs on the United States.
Everything keeps getting bigger in Texas. In a sign of anticipated corporate growth, the New York Stock Exchange and Nasdaq are galloping to Dallas to prevent a new local stock market from wrangling their customers. The city has ambitions of becoming a far more powerful commercial hub, but for now, there’s less substance than swagger.
The Lone Star State is making a strong bid to muscle aside rivals east and west. Business-friendly regulation, stronger-than-average economic expansion, and recent backlash against socially conscious investing are helping it chip away at California’s technology dominance, Delaware’s legal supremacy, and New York’s financial fortitude.
It would be a feat to unseat any one of these respective strongholds, let alone all three. Doing so would transfer substantial employment, wealth and consumption to a state that ranks worst, opening new tab in the country for quality of life, based on an annual CNBC study of places to do business. Texas scores poorly on healthcare, education ,and protections against discrimination, and its restrictive abortion ban also threatens to deter younger workers.
Money is talking loudly, though. On a per-capita basis, the state’s GDP is 25% smaller than California’s and in line with the U.S. average, but at $2.7 trillion, it produced enough goods and services last year to qualify as the world’s eighth-biggest economy, squeezed between France and Italy.
Column chart showing GDP growth rate in Texas, California, New York, Florida and USA from 2017 to 2024.
Governor Greg Abbott can also justifiably crow about growth. Texas added more than 180,000 jobs, the most of any state, in the year through February. More than 200 companies, including Tesla (TSLA.O), opens new tab and Chevron (CVX.N), opens new tab, moved, opens new tab their headquarters there between 2018 and 2023, nearly half the publicly traded ones that relocated over the span, real estate giant CBRE found. Many arrived from California, eighth on CNBC’s quality of life measure, escaping bureaucratic red tape and taxes on personal and corporate income.
The governor is also challenging Delaware, legal home to some 2 million businesses, and two-thirds of S&P 500 Index (.SPX), to open new tax members. Texas last year rolled out a new specialized corporate judicial system, modeled after Delaware’s Court of Chancery, to woo companies from a place renowned as a reliable venue for boards and shareholders.
Rounding off the campaign is a push into capital markets. TXSE, a company started by trading technology entrepreneur James Lee and backed by BlackRock (BLK.N), opens new tab, Citadel Securities and Charles Schwab (SCHW.N), opens new tab, formally submitted, opens new tab its Texas Stock Exchange plans to U.S. regulators in January. The Big Apple bourses were sufficiently worried to yeehaw themselves, as the Intercontinental Exchange-owned (ICE.N), opens a new tab NYSE opens its own southern outpost in Dallas, and the Nasdaq (NDAQ.O), opens new tab and establishes regional headquarters there.
This is impressive momentum, but the power of incumbency is immense. Other would-be contenders for New York’s throne also have tried to ride political and market fads. The Long-Term Stock Exchange, for example, started in 2020 amid exuberance over the kind of sustainable investing goals that sparked blowback from Texas and elsewhere. It counts just two listed companies so far.
Similarly, IEX aimed to challenge algorithmic trading, its message of rigged markets propelled by the bestselling book “Flash Boys.” Co-founder Brad Katsuyama aimed to snag 8% of market volume by 2017, but has less than 3%, according to CBOE data. It also abandoned efforts to compete for corporate listings five years ago. “It has become clear that the legacy exchanges have a stronghold on this market,” Katsuyama said, opens new tab at the time.
The New York markets are also overhyping the opportunities. For one thing, investing in Texas-based companies offers no obvious advantage, judging by an exchange-traded fund tracking them since July 2023.
Line chart comparing the Texas Equity Index ETF with the S&P 500 Index and the Nasdaq Composite Index
In their fanfare, the NYSE and Nasdaq separately touted a combined $6 trillion of Texas-based market capitalization. A dozen companies, however, account for more than half the sum. NYSE’s Lone Star exchange opened last week with a secondary listing from President Donald Trump’s social media company. Despite the recognizable brand and a $4 billion equity value, Trump Media and Technology (DJT.O), opened a new tab and generated less than $4 million of revenue last year.
Even so, if billionaires such as Tesla boss Elon Musk or Houston-born Michael Dell were to sign up their companies as TXSE anchor tenants, they would give the fledgling exchange a running start. Local lawmakers are already helping with legislation, opening a new tab to ban trading taxes and to curb the power of assertive investors.
The Texas exchange’s ambitions extend to the entire U.S. southeast and its 14,000 private equity-backed firms, where it will push its “anti-woke” credentials and potentially shun the trifling companies welcomed elsewhere to burnish its credibility. TXSE also could compete by charging brokers lower fees, especially at the market close each day when New York venues levy a premium and collect the bulk of their trading revenue.
Winning market share will depend heavily on attracting sufficient volume for investors to buy and sell stocks quickly and easily, which is no easy task. Only about 40% of last year’s trading even occurred at the major exchanges, down from nearly two-thirds a decade ago.
Market leaders elsewhere are also fighting back. Delaware last month rewrote the rules behind a court ruling to void Musk’s $56 billion Tesla pay package, after which he drove his electric-car maker off to Texas. The controversial new law is designed to help the First State retain its position as the country’s corporate capital by giving, opens new tab controlling stockholders greater protections from smaller investors, among other sops to boards. Combined with Delaware’s two centuries of legal decisions from judges specialized in business law, the temptation to flee might wane, especially for an untested upstart.
The highway into Texas also sometimes leads right back out. Chairman Larry Ellison moved software goliath Oracle (ORCL.N), opening a new tab from Northern California to Austin in 2020, triggering fresh handwringing about Silicon Valley’s position as the world’s technology nerve center. He packed up the company last year for Nashville; however, he was lured by the healthcare industry and more than $200 million of tax breaks and other economic incentives.
Cities from Seattle to Miami have tried to position themselves as tech-hub rivals to the San Francisco Bay Area, but it is almost impossible to artificially replicate its venture capital, entrepreneurial, and engineering communities. The same is true when it comes to Delaware corporate jurisprudence and New York finance. In those areas, Texas will get only so big.
The New York Stock Exchange said on March 31 that its Texas outpost was open for business, becoming the first securities bourse to operate in the state, with Trump Media & Technology as the first company to list there.
Nasdaq said on March 18 that it would open a new regional headquarters in Dallas and vowed to make additional investments in Texas to improve stock trading.
On January 31, TXSE said that its Texas Stock Exchange had filed registration forms with the U.S. Securities and Exchange Commission proposing to run a stock trading venue, list corporate issuers and exchange-traded products, oversee auctions, and sell data products.
The White House's sweeping tariffs have ledsome officials to speculatethat Apple would attempt to shift manufacturing of the iPhone to the U.S. But that idea is"pure fantasy,"according to reporting from 404 Media — and corroborated by comments made by Apple CEO Tim Cook, as well as an excerpt of Walter Isaacson’s biography of late CEO Steve Jobs,cited by The Verge. The reporting notes the iPhone is a "truly international device," with minerals alone coming from79 countries.
