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In a bold and controversial move, President Donald Trump's sweeping global tariffs took effect just after midnight Wednesday, targeting nearly 90 countries. Chief among them: a staggering 104% total tariff on Chinese imports, marking one of the most aggressive trade actions in recent U.S. history.
This escalation follows China's retaliatory 34% levy on American goods, which came in response to an earlier 34% tariff imposed by Trump. "It was a mistake for China to retaliate," White House press secretary Karoline Leavitt said Tuesday. "The president, when America is punched, he punches back harder." The final tally: a 20% base tariff, plus the reciprocal 34% and a retaliatory 50%—totaling 104%.
Trump's economic team, led by his Council of Economic Advisers, designed the tariff matrix to reflect bilateral trade deficits. Nations like Japan, Israel, and the European Union now face tariffs of 24%, 17%, and 20% respectively. South Korea was hit with 25%. These rates supplement a universal 10% tariff enacted April 5.
While the administration frames this as a "Declaration of Economic Independence," the financial markets responded with alarm. The S&P 500 dropped 10.5% in two days after Trump's initial announcement—the sharpest decline since March 2020. The Dow Jones fell 320 points Tuesday, and the Nasdaq confirmed a bear market with a 20% slide from its recent high.
"We've now reached an impasse that will likely lead to long-term economic pain," warned Alfredo Montufar-Helu of The Conference Board. Others, like Deborah Elms of the Hinrich Foundation, remain skeptical of Trump's strategy. "I think the U.S. is overplaying its hand," she told the BBC. "The risks are just so high."
Despite the turmoil, Trump remains undeterred. "We're taking in almost $2 billion a day in tariffs," he said at a Tuesday event. Leavitt confirmed that Trump has instructed his team to prepare "tailor-made" trade deals for any country willing to negotiate. However, she added, "The president expects these tariffs are going to go into effect."
China, meanwhile, is not backing down. State media has responded defiantly, declaring: "We don't create trouble, but we don't fear trouble." The top Weibo post called the situation a "smokeless financial war."
