Trump’s Global Economic Tariffs 

Alex Rogers, Consultant 
03/04/2025

Overview of tariff announcement

US President Donald Trump’s self-declared “Liberation Day” speech in the White House Rose Garden rewrote the global economic order and cemented the President’s return of America to intense protectionism. Using questionable calculation methods, Trump highlighted his own assessment of how other countries treat the United States with their own exports and created tariffs based on these levels.

Whilst independent experts have raised serious doubts to the credibility of these numbers, Trump’s administration has stated that these figures include calculations around missed import opportunities in areas such as currency manipulation, GM crops and even theft of intellectual property.

A 10% baseline has been applied to most countries with higher punitive tariffs applied to the worst offenders in the President’s eyes. These figures come in addition to the 25% already implemented global tariffs on foreign made cars and steel imports. The President stated that in ‘kindness’ the United States will only tariff half of their percentage calculation for each country, something even American allies will react to through gritted teeth.

Market reaction

The initial reaction came from global markets, which unsurprisingly plummeted following the announcement. Tech companies immediately felt the pinch suffering a 3.5 percent drop overnight. Crude oil prices also fell by 3.3%, leaving investors rushing to the safe haven of gold markets to escape further market fluctuations. These announcements far exceeded the baseline expectations, leaving many traders hoping that negotiations to bring these tariffs down will be begun and concluded swiftly.

The initial reaction of world leaders is one of steep concern, leaving many to spend today placating domestic businesses and reassuring industries that governmental support will be at hand. Whilst this will not dampen expectations of a wider economic slowdown and recession, it will force leaders to rethink their export market and the United States role within that.

It also raises key questions on the impact to global supply chains and investor confidence with the United States, with many businesses already considering possibilities to avoid the U.S. completely. With export businesses already feeling the pinch and prices expected to continue to rise following retaliatory measures, uncertainty remains the key concern amongst the export community.

European Union

The European Union is widely expected to retaliate to this new United States global trade war, acting as a bloc to respond in kind to the 20 percent increase to EU goods. EU Commissioner Ursula von der Leyen has responded this morning with “If you take on one of us, you take on all of us” in a bold response to the “uncertainty spiral” of the tariffs. However European leaders closer to the Trump administration, such as Italian Prime Minister Giorgia Meloni, who still hold hopes that an escalatory trade war may be prevented.

The fact that EU initial countermeasures are almost finalised, this seems increasingly unlikely, but with initial countermeasures not expected until mid-April intense efforts will be undertaken within the coming week to limit this escalation. What is clear, is that these tariffs dispel any denying that the transatlantic relation between America and Europe has changed for good, and not just on defence and security issues.

United Kingdom

The British Prime Minister, Sir Keir Starmer, rallied this morning to business leaders to steady the ship whilst Business and Trade Secretary Jonathan Reynolds took to the media to highlight the government’s “calm heads” response to the 10 percent increase the United Kingdom has been lumbered with. With UK car manufacturers and the pharmaceutical to be hardest hit, the Government has brought industry leaders into Number 10 to reassure them that they remain “priority concerns.”

Behind closed doors the UK Government will find itself under intense pressure to navigate these new waters, made particularly difficult by the UK’s fragile economic position and a government agenda built on ‘growth’ that is yet to being realised. To make matters worse for the government, its own the official forecaster estimates a worst-case scenario trade war and wipe out the £9.9bn of economic headroom Chancellor Rachel Reeves gave herself at last week's Spring Statement.

Whilst Number 10 are leaning into the narrative that it is Starmer’s unlikely relationship with President Trump that has halted these tariffs at 10%, there will now be renewed efforts to push forward on a U.S. trade deal that could further reduce these pressures.

Brexiteers, including the Shadow Business Secretary Andrew Griffiths, and right-wing newspapers have been quick to point out this morning the role of Brexit in preventing these 20 percent tariffs. However, this ‘silver lining’ for some will not remove the trepidation at the news that if this trade war escalates, it could reduce UK economic growth by 1%, affecting thousands of jobs and exacerbating an already fragile economy.  

China

China will feel the hardest hit of all with a rise of 34% in addition to the 20% of tariffs already imposed earlier in this administration. The combined 54% has led China to hit back, branding these as “bullying,” and looking to its own retaliatory measures with precision. Chinese growth remains President’s Trumps focal point with the response form Chinese Premier Xi Jinping to be closely monitored by the U.S.

Neither leader will want to be seen to curtail to the other, so expect further calculated measures, and a stand-off as to who engages the other leader first. This comes at a time when China’s economic slowdown has already created intense domestic pressures, so further global engagement is likely to show China as a more reliable trading partner than the U.S.A under Donald Trump.

Wider implications

Much of the wider world has been subjected to the 10 percent tariffs as experienced by the UK. Nations that the Trump administration is keen to enhance relations with, such as Saudi Arabia and Australia, are still in the firing line showing the lack of geopolitical awareness in these decisions.

For other allies such as Taiwan (32 percent) and Japan (24 percent), both of whom the United States remains very close with, these tariffs will be a hammer blow to what was considered impenetrable relationships. The decisions have incited “fury” from leaders and left them mulling about the future of supply chains, pricing and investor confidence which are all certainly at risk.

More concerningly emerging nations are also taking a beating, with recently devastated Myanmar now subject to 44 percent tariffs, something when combined with the dismantling of USAID could have serious repercussions following the earthquake last week. Mass producers Vietnam (46 percent), Thailand (36 percent), India (26 percent) and Bangladesh (37 percent) are also facing new pressures as Trump looks to curb their industries in favour of American markets.

Understanding Trump’s mentality behind this remains incredibly difficult. With Russia omitted completely and Iran only subjected to 10 percent tariffs, the cold calculation behind these announcements remains baffling. The U.S. President’s love for protectionism appears to have little direction or coherence following this announcement.

Whilst this is obviously intended to woo American voters, it is almost certain the impact of these decisions on the U.S. economy will cost jobs and damage industries unable to find needed materials in the United States. Whether this is yet another ploy for more ‘deals’ to be made with countries now rushing to bend the President’s ear remains unclear but once again Donald