What Just Happened with Tariffs?
April 4, 2025
On April 2, 2025, President Trump declared a national emergency over the U.S. trade deficit and followed up with a sweeping Executive Order that sent shockwaves through global markets. At the heart of it? Two big moves on tariffs.
First up: a 10% universal tariff on all U.S. imports, effective April 5. The stated goal? Raise revenue — plain and simple.
Second: targeted tariff hikes on over 25 of the U.S.’s largest trading partners, kicking in April 9. These are “reciprocal” tariffs, scaled based on each country’s trade deficit with the U.S. — and they’re much higher than expected.
Here’s a quick rundown of the biggest hikes:
China: +34% (bringing the total to a whopping 54% this year)
European Union: +20%
Japan: +24%
India: +26%
Vietnam: +46%
And these aren’t coming out of nowhere. They layer on top of existing tariffs — including 25% duties on non-USMCA compliant goods from Mexico and Canada, plus targeted hits like 10% on Canadian energy and potash, 25% on steel and aluminum, 25% on imported autos, and an extra 20% on China.
Global Response: Swift and Sharp
Today, China hit back announcing its own 34% tariff on all U.S. imports, effective April 10. They also threw in export controls on rare earth elements (a big deal for high-tech manufacturing). The EU and several Asian partners are reportedly preparing countermeasures too. Markets reacted instantly and not in a good way. Wall Street lost around $2.5 trillion in value. The Nasdaq alone dropped nearly 6%. Big-name multinationals like Apple and Nvidia took heavy hits. JPMorgan just raised its U.S. recession risk to 60%, calling these tariffs a “primary trigger.”
What’s Next?
More tariffs could be coming — especially on sectors like semiconductors, pharma, and critical minerals. The 10% universal tariff looks like it’s here to stay, but the rest may be bargaining chips in ongoing negotiations. We’ll also likely see U.S. exports take a hit as partners retaliate — especially in services, tech being the prime target. The U.S. may fast-track new tax cuts to cushion the blow. Abroad, we could see increased fiscal stimulus, particularly in Europe and China. Central banks, including the Fed, might lean toward rate cuts to support growth — even if inflation rises in the short term.
This marks a serious shift in U.S. trade policy with far-reaching consequences. Whether this escalates into something larger or turns into a strategic negotiation dance will depend on what comes next — in both markets and policy circles.
The next few months will be crucial.