U.S. President Donald Trump escalated global trade tensions on Wednesday by imposing sweeping tariffs on imports from both allies and rivals, sparking market turmoil and threats of retaliation from major economies.
The new measures include a 25% tariff on all foreign-made cars and light trucks, set to take effect immediately, with auto parts also due to be taxed by May 3. Trump, calling it “Liberation Day,” described the move as a declaration of economic independence, arguing that it would protect American industries and workers.
“This is one of the most important days, in my opinion, in American history,” Trump said while unveiling a chart of the tariffs during a White House Rose Garden address.
The European Union and China swiftly condemned the tariffs and vowed countermeasures, while Australia criticized the move as damaging to close allies. China warned that the trade war could “endanger” global economic growth.
Stock markets reacted sharply to the announcement, with Tokyo’s Nikkei plunging over 4% and Vietnam’s Hanoi shares dropping more than 5%. U.S. futures fell, while investors rushed to safe-haven assets like gold, which hit a new record high.
Trump’s tariffs hit key trading partners, with China facing an additional 34% tariff, bringing the total tariff rate to 54% on Chinese goods. The European Union will be subject to a 20% tariff, while Japan faces a 24% levy, which its trade minister called “extremely regrettable.”
Other U.S. allies, including Britain, will face a baseline tariff of 10%, signaling a broad shift in American trade policy.
Despite the backlash, the Trump administration defended the measures as necessary to reduce trade deficits and protect American manufacturing. However, global economic experts warn that the move could disrupt supply chains and fuel economic instability.
As tensions rise, world leaders are expected to negotiate potential resolutions, but the latest measures mark a significant escalation in the ongoing trade war.
