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US President Donald Trump announces across-the-board 10% baseline tariff effective April 5
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Higher duties on products on many US trading partners were also imposed
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Philippine exports to the US will carry a 17% tariff starting April 9
US President Donald Trump’s announcement on April 2 (US time) to impose a 10% tariff on majority of goods imported to the US, effective April 5, has intensified a global trade war that threatens to stoke inflation and stall growth.
Aside from the new tariff, higher duties on products from dozens of countries – from allies to rivals – were also announced, effective April 9, as part of Trump’s sweeping “Liberation Day” tariff policy. Duties will be 24% on Japan and 20% on the European Union, in lieu of the universal 10% tariff.
China would be hit with a 34% tariff, above the 20% Trump previously imposed earlier this year. This brings the total new levies on China to 54%, near the 60% he had threatened while on the campaign trail.
Chinese exporters, like those from other economies around the world, will face a 10% baseline tariff, as part of the new 34% levy, on almost all goods shipped to the world’s largest consumer economy from April 5 before the remaining, higher “reciprocal tariffs” take effect from April 9.
Philippine exports to the US, on the other hand, will be slapped with a 17% tariff starting April 9. The 17% tariff is, however, still half (34%) the tariff on US goods coming to the country.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” the US president said.
Outside economists have warned that tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average US family by thousands of dollars.
Exempted from the announcement were Canada and Mexico, the two largest US trading partners, which already face 25% tariffs on many goods.
Within hours of the announcement, the US Senate voted 51-48 to approve legislation that would terminate Trump’s Canadian tariffs, with a handful of Republicans breaking with the president. Passage in the Republican-controlled US House of Representatives, however, was seen as unlikely.
The sweeping duties immediately caused turbulence across world markets and drew condemnation from other leaders now faced with the end of decades of trade liberalization that have shaped the global order.
Trump’s top economist, Stephen Miran, said the tariffs would work out well for the US in the long run, even if they cause “some initial disruption.”
As Asia awoke to the news, Japan’s Nikkei hit an eight-month low while US and European stock futures dropped sharply following weeks of volatile trading. US stocks have lost nearly $5 trillion of value since mid-February.
China, the world’s second-largest economy urged the US to immediately cancel its latest levies. Otherwise, serious countermeasures would also be imposed.
US Treasury chief Scott Bessent urged other nations not to retaliate as this could lead to dramatically higher prices for consumers on everything from bicycles to wine.
“If you retaliate, that’s how we get escalation,” said Bessent.
The effective US import tax rate has shot to 22% under Trump from just 2.5% in 2024, according to Fitch Ratings.
Said Fitch’s Olu Sonola: “That rate was last seen around 1910. This is a game-changer, not only for the US economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”
