The world’s economies are waking up to a major tranche of new tariffs on their exports to the US today (3 April) after president Donald Trump announced ‘reciprocal’ duties at a White House event.
The UK faces the lowest rate imposed by Trump of 10% on its exports to the US, while the EU is facing a higher 20% rate. China, meanwhile, now faces a total tariff rate of 54% once the 34% reciprocal tariff is imposed. A spate of other nations deemed the “worst offenders” for trade barriers on US goods also face high rates. These include Vietnam at 46%, Thailand at 36% and Japan at 24%.
The president also confirmed a 25% tariff “on all foreign-made automobiles”, which entered force at midnight last night.
The 10% blanket tariff on all imports will come into effect on 5 April, while reciprocal tariffs will be introduced on 9 April.
UK rates
The UK’s 10% base tariff rate is in the lowest category of those announced by Trump, though this does not account for the 25% rate now faced by UK car – as well as steel and aluminium – exporters, a source of concern for prime minister Sir Keir Starmer’s government.
The FT reports that Starmer said “clearly there will be an economic impact from the decisions the US has taken both here and globally”. He added that “I want to be crystal clear: we are prepared”.
Make UK chief executive Stephen Phipson said that the new rates would be “devastating for UK manufacturing”, particularly 25% rates on steel and aluminium.
Business and trade secretary Jonathan Reynolds, meanwhile, said he was “disappointed by anything that makes our trading position more difficult”, though he stressed that the UK was in a better position than many other nations following the announcements.
He remarked that a fresh trade deal with the US could not only remove the new tariffs, but give UK businesses “stronger market access to all parts of the US”. Starmer has also said the UK has a “range of levers” it can pull to secure such a deal.
‘Endangering global development’
China has responded to the tariffs to condemn US “unilateralism and protectionism” and vow retaliation, though it noted it remains “in communications” with the US aimed at a resolution based on “equal dialogues”, according to the South China Morning Post.
It said the US should “immediately cancel” the new tariffs and argued that they “endanger global economic development”.
The new measures on Chinese goods also include a close to the “de minimis” loophole that allows imports of under US$800 to be imported to the US for free, according to the Guardian.
Europe hits back
Ursula von der Leyen, president of the European Commission, argued the 20% rate on European exports to the US would have “immense consequences” in a statement yesterday.
The application of universal tariffs is a “major blow to the world economy”, she said, and that “the consequences will be dire for millions of people around the globe”.
“Millions of citizens will face higher grocery bills. Medication will cost more as well as transportation. Inflation will go up. And this is hurting in particular the most vulnerable citizens. All businesses – big and small – will suffer from day one.”
EU-US trade had created “millions of jobs” in the years since the Second World War, she added. While she acknowledged Trump’s argument that some nations “are taking unfair advantage of the current rules” on trade, she said that “reaching for tariffs as your first and last tool will not fix it”.
She promised a “first package of countermeasures in response to tariffs on steel”, as well as further measures “to protect our interests” should negotiations fail. Addressing Europeans directly, she said the continent “has everything it needs to make it through this storm”.
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