Trump escalates extensive tariffs as new era of trade competition begins

April 03, 2025: US President Donald Trump as expected has escalated his protectionist economic policies with the introduction of sweeping tariffs on imports, This move is going to reshape global trade dynamics. Announced from the White House’s Rose Garden in what Trump called “Liberation Day,” the measures introduce a baseline universal tariff along with targeted reciprocal duties, which will be imposed in addition to existing levies.

India Among the Key Targets

According to The Times of India, Trump on Wednesday unveiled a 26 per cent "discounted" reciprocal tariff on Indian imports. Speaking at the “Make America Wealthy Again” event, he emphasised that while the charges were not fully reciprocal, they represented a significant shift in trade relations.

“This is Liberation Day, a long-awaited moment. April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again,” Trump declared from the Rose Garden.

Displaying a chart detailing tariffs imposed by various nations—including India, China, the UK, and the European Union—Trump underscored what he called unfair trade practices. The chart highlighted India’s 52 per cent tariffs, which included what he labeled as “currency manipulation and trade barriers.” In response, the US will impose a reciprocal tariff at half that rate—26 per cent.

Trump singled out India’s motorcycle tariffs as an example of what he deems unfair trade policies. “The United States charges only a 2.4 per cent tariff on motorcycles. Meanwhile, Thailand and others impose much higher rates—60 per cent, 70 per cent for India, and 75 per cent for Vietnam,” he said.

Similarly, he criticized the European Union for its 10 per cent tariff on American automobiles, compared to the US’s 2.5 per cent charge on foreign cars. “Perhaps worst of all,” Trump said, “are the non-monetary restrictions imposed by South Korea, Japan, and many other nations.”

Global Economic Implications

According to The Financial Times, many economists fear these additional levies could drive inflation higher in the US economy. The tariffs, however, are expected to remain in place until Trump deems his objectives—boosting revenues and revitalizing domestic manufacturing—achieved.

The Key Tariff Measures:

• A 10 per cent baseline tariff on imports from all countries.

• “Individualized reciprocal higher tariffs” ranging from 10 per cent to 50 per cent on 60 nations that the US claims have large trade surpluses with it.

• The White House Council of Economic Advisers calculated the sum of tariffs and non-tariff barriers these nations impose on US goods. The new US reciprocal tariff is set at half that level.
Implementation Timeline:

• The 10 per cent universal tariff takes effect April 5, 12:01 AM.

• The higher reciprocal tariffs on the 60 designated countries will be enforced from April 9, 12:01 AM.

Countries Affected:

The European Union faces a 20 per cent tariff, reflecting Trump’s ongoing criticism of what he calls “unfair trade practices.” China, already subject to a 20 per cent tariff, will now face an additional 34 per cent reciprocal duty, bringing the total levy to 54 per cent.

Other significant tariff increases include:

• Japan – 24 per cent
• Vietnam – 46 per cent
• Cambodia – 49 per cent
• Sri Lanka – 44 per cent
• Myanmar – 44 per cent
• Saint Pierre and Miquelon (France’s overseas territory) – 50 per cent

Notably, Mexico and Canada will be exempt from reciprocal tariffs, though goods failing to meet the USMCA trade deal terms will still face a 25 per cent duty. Additionally, cars and car parts already subjected to a 25 per cent tariff will not see additional hikes.

Purpose and Future of the Tariffs

Trump’s administration has framed these tariffs as an effort to reduce the US trade deficit, which he argues has long eroded American manufacturing and wages while benefiting foreign economies.