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Dow Jones NewsApr 2, 10:19 PM UTC
MW Trump's China tariffs will total 54%. Here's what he's charging other countries.
By Victor Reklaitis
President rolls out 10% baseline tariff for all U.S. imports - plus much higher levies for trading partners like the E.U., Japan and others
President Donald Trump on Wednesday said his new plan for U.S. tariffs will consist of a universal tax of 10% on imported products from all other countries, as well as additional "reciprocal" levies on "nations that treat us badly."
Trump said China will face a new reciprocal tariff of 34% and the European Union will be hit with a new levy of 20%, while Japan's tariff will be at 24%. He described these duties as not a full reciprocal tariff but rather about half of what other nations "have been charging us."
For China, the latest import tax of 34% comes on top of a 20% tariff on Chinese imports that the second Trump administration already put into effect - so the total Trump 2.0 duty on China now stands at 54%.
Regarding the universal tariff, Trump said his administration "will establish a minimum baseline tariff of 10%," saying "that'll be on other countries to help rebuild our economy and to prevent cheating."
"Today, we're standing up for the American worker, and we are finally putting America first," Trump said in his address in the Rose Garden at the White House.
Senior White House officials told reporters the baseline tariff of 10% will go into effect on Saturday at 12:01 a.m. Eastern time, while the reciprocal levies will go into effect in a week, on April 9 at 12:01 a.m. Eastern.
MarketWatch Live: Stock futures tumble as Trump unveils latest tariffs - plus a look at the tariff table Trump showed in the Rose Garden
Ahead of the president's speech, the Trump team still had been deciding on an approach for his latest tariffs, according to multiple published reports, even though the president on Monday night told reporters he had settled on a plan.
For weeks, the rollout was expected to feature "reciprocal tariffs" for other countries' products, with Trump and other administration officials often saying something along the lines of, "Whatever they charge us, we'll charge them." Officials also had said that the individualized reciprocal tariffs would take into account each country's nontariff trade barriers and that they would potentially focus on 10 to 15 trading partners - which some Trump officials have labeled the "dirty 15" - that have significant barriers and account for the bulk of the U.S. trade deficit.
But multiple published reports then said that in recent days Trump had been considering a 20% tariff for virtually all U.S. trading partners or for most imports. That indicated a return to the universal tariff of 10% or 20% that Trump promised during his 2024 presidential campaign. There were other options also under consideration this week.
In the end, Trump opted to go with an approach that combines a 10% universal tariff with "reciprocal" levies. He and other administration officials have been billing Wednesday as "liberation day."
Daniela Sabin Hathorn, senior market analyst at Capital.com, said in a note Wednesday before Trump's speech that "investors will be parsing every detail to understand whether the U.S. is entering a new era of autarky - or simply posturing to gain leverage in trade negotiations." Autarky is defined as economic self-sufficiency.
The main U.S. stock indexes SPX DJIA COMP finished with gains on Wednesday ahead of Trump's address, which took place after the market's close. Stock futures (ES00) (YM00) were trading sharply lower following the president's announcement. The S&P 500 stands about 8% below its Feb. 19 record close, with the drop blamed in large part on tariff concerns.
Related: It's Trump's 'liberation day.' How investors should prepare for a choppy stock market after April 2 tariffs.
Other tariff programs also see action
In addition to rolling out the new tariffs, the Trump administration faced a decision on whether to continue to exempt some Canadian and Mexican goods from the 10% to 25% levies on products from those two U.S. neighbors that went into effect a month ago. In early March, administration officials made another pivot on Canada and Mexico tariffs by saying some products that fall under the U.S.-Mexico-Canada Agreement would be exempt until Wednesday.
On Wednesday, senior White House officials said USMCA-compliant goods would continue to receive preferential treatment for the time being. The White House has estimated that about 50% of products coming from Mexico are USMCA compliant, while about 38% of the goods Americans import from Canada are currently compliant with the free-trade agreement.
What's more, so-called secondary tariffs of 25% on countries that purchase crude oil from Venezuela were slated to take effect Wednesday.
Trump's new 25% tariff on cars not made in the U.S. is due to take effect Thursday, while his 25% levy on some car parts is slated to take effect no later than May 3.
There are also new 25% duties in effect on steel and aluminum imports. Trump has promised other sector-based tariffs and indicated he's focused on computer chips, pharmaceuticals and lumber, but the timing for such levies hasn't been clear.
"Tariffs are all likely stacking," Chris Krueger, an analyst and managing director at TD Cowen's Washington Research Group, said in a note on Wednesday morning. That means Krueger expects they'll build on each other and result in higher overall duties.
Economists have warned that tariffs will drive inflation at a time when Americans are already frustrated with elevated prices, while supporters of tariffs maintain that they're an essential tool for boosting U.S. manufacturing, creating jobs and reducing dependence on foreign imports.
Opinion: Tariffs aren't necessarily bad. Here's what Trump's critics are getting wrong.
Read on: Business execs have a message for Trump on tariffs: 'Just stop talking about it and do it'
-Victor Reklaitis
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04-02-25 1819ET
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