Impacts Unclear As Trump Tariffs Take Effect

President Donald Trump announced a sweeping set of tariffs on other countries on April 2, which he called “Liberation Day.” All tariffs took immediate effect at midnight April 2. He had originally said they were going to be “reciprocal,” meaning one-for-one. But the tariffs he announced were arrived at by a formula of calculating other countries’ tariffs against U.S. products, combined with non-tariff barriers like technical barriers or “currency manipulation” and imposing a tariff of half that figure in some cases, which Trump called a “discounted” tariff rate.

The products they will directly affect include many that travel by barge, including steel, cement and ag products. His previously-enacted tariffs on Canada and Mexico are already affecting the import of barge-moved products like bulk fertilizer. The effects of the sweeping new tariff-based trade order are unknown, especially since most other countries have not yet announced their countermeasures including retaliatory tariffs on U.S. products. But they are sure to affect barge traffic.

Trump arrived at his tariff decisions after he directed the U.S. trade representative, the Treasury Department and the Council of Economic Advisers to prepare reports on “Reciprocal Trade and Tariffs” that were delivered April 1. He invoked national security authority to declare an “emergency,” under laws by which Congress has delegated its tariff authority to the president. “Chronic trade deficits are a national emergency,” Trump said.

Trump imposed a broad baseline of 10 percent tariffs on all imported products, with the “discounted reciprocal” tariffs on top of those. The United States imports about $3 trillion in goods each year. Assuming the same level of trade, a 10 percent tariff alone could generate $600 billion a year in income—unless, as many economists warn, the tariffs themselves and retaliatory tariffs from trading partners slow world trade and economic activity.

In his Rose Garden remarks, flanked by 20 members of the United Autoworkers Union, whose president he invited to the podium, Trump said the United States had been “looted, pillaged and raped” economically by “friends and foes alike.” A lengthy statement on the White House website released the same day depicted the global trading system that the United States led after World War II as a failure for the U.S. because it resulted in trade imbalances and because other countries maintained higher tariff rates than the United States over many products.

The total tariff rates for each country were displayed on a chart Trump held up and that is available on the White House website. Total tariffs were 34 percent against China, 20 percent against the European Union and 40 percent against Vietnam—the U.S.’s third largest trading partner after Canada and Mexico. Cambodia had the highest rates at 49 percent, while dozens of countries including the United Kingdom, Chile, Australia and Turkey had 10 percent. U.S. ally Israel had announced the immediate cancellation of all tariffs on all U.S. products but was still slapped with a 17 percent tariff rate.

Whether the tariffs will stay in place, and for how long, remains an open question that rattled markets. Even though Trump has said there would be “no exceptions,” at other times he has said bilateral negotiations could alter some of the tariffs.

Reactions Vary

The reactions of other countries have varied. Australia vowed no countermeasures while denouncing Trump’s tariffs. Other countries are studying possible retaliatory tariffs against U.S. products. China’s Ministry of Commerce said, “There are no winners in a trade war, and protectionism is not a viable path forward.” European Commission President Ursula von der Leyen said Wednesday that the European Union is finalizing a package of countermeasures in response to Trump’s previously imposed 25 percent levy on steel—which is exempt from additional reciprocal tariffs—and is now preparing further countermeasures against Trump’s 20 percent reciprocal tariffs on the E.U.

Brazil, which was hit with a 10 percent tariff, passed a reciprocity bill on April 2 allowing it to retaliate against tariffs on Brazilian goods by any country or trade bloc. Brazilian President Luiz Inácio Lula da Silva earlier said the country was considering appealing to the World Trade Organization over Trump’s steel tariffs.

Some countries saw advantages in the new trade order. The president of Colombia said “neoliberal” trade policies were “dead,” but also said his country could benefit from U.S. tariffs, and he promised his country would not impose more duties on U.S. goods unless the U.S. tariffs took away Colombian jobs.

In an effort to head off Trump’s tariffs, Vietnam had just announced a lowering of tariffs on many U.S. goods, including cars, liquefied natural gas and ethanol, as well as allowing Elon Musk’s Starlink service to operate in the country on favorable terms. Vietnam’s “charm offensive” failed to stave off tariffs, however. Business publication NikkeiAsia said Vietnam would be the “chief loser” from tariffs that were “worse than promised and feared.” The Vietnam tariffs could affect many U.S. companies doing business and setting up factories there to avoid both Chinese policies and Trump’s actions against them, including big brands like Nike. The United States is Vietnam’s largest export market. Pham Luu Hung, chief economist at leading broker Saigon Securities, tried to reassure investors. He told business publication The Investor that the Trump administration had recognized Vietnam’s progress in addressing trade concerns and said upcoming negotiations could change the tariffs.

Trump has also threatened additional layers of punitive tariffs against countries doing business with either Iran or Russia as he seeks to tighten the screws against both regimes.

Tariffs enacted so far as of early April include:

• A 25 percent tariff on steel and a 10 percent tariff on aluminum imports (all countries), affecting approximately $47 billion in trade.

• For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect and are unaffected by this order. This means USMCA compliant goods will continue to see a 0 percent tariff, non-USMCA compliant goods will see a 25 percent tariff, and non-USMCA compliant energy and potash will see a 10 percent tariff. In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12 percent reciprocal tariff.

• Tariffs on a wide range of Chinese goods, with rates increased to 20 percent on all Chinese imports as of March 4, 2025.

• A 25 percent tariff on automobile imports took effect on April 3, and a similar tariff on auto parts is scheduled for May 3.

Business analysts are scrambling to interpret the new tariff world trade order. The business press has reacted mostly negatively to Trump’s tariff proposals. The Wall Street Journal made the announcement its top story, with a headline that read, “Stocks Plunge, Dollar Sinks After Trump‘s Tariffs Blitz.” The Nasdaq stock index dropped 4 percent, and the Dow Jones Industrial Average dropped 1,100 points. In a negative editorial, the WSJ warned, “The overall economic impact of Mr. Trump’s tariff barrage is unknowable—not least because we don’t know how countries will react. If countries try to negotiate with the U.S. to reduce tariffs, the damage could be milder. But if the response is widespread retaliation, the result could be shrinking world trade and slower growth, recession or worse.”

Before Trump, the United States had among the world’s lowest tariff rates, between 2 percent and 4 percent, and 70 percent of all imported goods had no import duties on them at all. Targeted tariffs from Trump’s first term on Chinese goods were maintained by and even increased by Joe Biden in the last months of his presidency.