US President Donald Trump has challenged the global trade order by imposing tariffs on goods imported into the US.

Trump said on Wednesday that a 10% tariff would be imposed on nearly all imports entering the US starting April 5, describing these measures as a way to “liberate” the US economy.

The White House also unveiled sweeping “reciprocal” tariffs on goods from the US’s largest trading partners, targeting a global trading system that, according to Trump, has “ripped off” the United States for decades.

Historically, the term “reciprocal” in trade refers to measures taken by both sides to ensure fairness in bilateral agreements. For much of the past 90 years, this typically involved reducing trade barriers. In the US, the Reciprocal Trade Agreements Act of 1934 signaled the end of an era of US protectionism, enabling the US and partner countries to negotiate lower tariffs on each other’s goods.

Under the new plan, tariffs on goods from China, the world’s largest exporter, will rise to 54%, reflecting an additional 34% tariff imposed by Trump on top of the existing 20% levied earlier this year.

The EU faces tariffs totaling up to 20%, while imports from Japan, a close Washington ally, will be subject to 24% tariffs. UK exports will incur a 10% tariff.

Tough measures on Asian countries

A 10% base tariff applies to imports from all countries. Beyond this, “individualized reciprocal higher tariffs” are planned for the 60 countries identified by the US as the “worst offending” due to their large trade deficits with the US. These reciprocal tariffs will range from 10% to 50%.

The specific tariff rate is calculated based on the White House Council of Economic Advisers’ assessment of the combined tariffs and non-tariff barriers imposed on US goods by a given country. Half of this assessed level will be applied as the reciprocal tariff rate for imports from the 60 designated “worst offending” countries.

Several Southeast Asian export hubs face tariffs approaching 50%. Cambodia is assigned a rate of 49%, Laos 48%, and Vietnam 46%.

Other countries facing tariffs above 40% include Sri Lanka (44%), Madagascar (47%), and Myanmar (44%). Saint Pierre and Miquelon, a small French territory off the coast of Newfoundland, Canada, is subject to a 50% tariff.

The high tariffs targeting several Asian countries are partly attributed to China shifting production to these nations, which then serve as conduits for exporting goods to the US.

Mexico and Canada, despite being frequent targets of Trump’s criticism, will be exempt from these new reciprocal tariffs. However, the existing 25% tariff on goods non-compliant with their 2020 trade agreement with the US remains effective.

The White House stated that cars and auto parts subject to the 25% tariffs announced last week will be exempt from the new reciprocal tariffs.

Bullion, energy resources, and minerals not domestically available in the US are also exempt from reciprocal tariffs. Additionally, semiconductors, pharmaceuticals, copper, and lumber will not be subject to these specific tariffs.

However, this exemption contrasts with previous actions and statements by Trump, who had already announced tariffs on copper and lumber and indicated potential tariffs on pharmaceuticals and computer chips.

Trump declares national emergency

The US President invoked emergency powers to implement the new tariffs. The administration declared a national emergency, citing “national security and economic security concerns arising from conditions reflected by large and persistent annual US goods trade deficits”.

US officials announced that the initial tariffs will take effect shortly. The basic 10% tariff is scheduled to begin at 00:01 on Saturday, April 5, with the higher reciprocal tariffs following at 00:01 on Thursday, April 9.

Negotiating exemptions or reductions might be possible, contingent on Trump’s discretion. The decree announcing the tariffs states that the president “may reduce or limit the scope” of the duties if “any trading partner takes significant steps to correct non-reciprocal trade arrangements and adequately align with the United States on economic and national security matters.”

However, US officials indicated a current focus solely on implementation. A senior White House official told the FT, “Of course countries want to see what they can do for more reciprocal trade. Right now, we’re focused on enacting the tariff regime.”

What is the purpose of tariffs?

Reducing the US trade deficit is a long-standing goal for Trump. In his Rose Garden speech, the president stated that he has advocated for this for over 40 years.

Administration officials attribute the erosion of manufacturing capabilities, wage depression, and the “transferring assets into foreign hands” to the US’s “massive” and “chronic” trade deficits.

Another objective is to compel companies to relocate production to the US. Trump anticipates that businesses will establish plants domestically to circumvent tariffs, thereby creating more jobs.

A US official said, “The goal is to restore American greatness and prosperity for everyday American workers in their communities.”

Correcting “unfair trade practices” is also cited as a goal. White House officials stated that Trump “has been clear for decades about his commitment to correct unfair trade practices by foreign trading partners, both friendly and hostile.”

While not explicitly cited by US officials as a primary justification, the tariffs are expected to generate significant revenue. Officials estimate the duties could bring in “hundreds of billions of dollars in any given year” or “trillions over a 10-year period,” potentially offsetting steep tax cuts.

Tariffs and beyond: A systemic shift

While Trump’s speech centered on tariffs and the potential for trade wars, it signifies the strengthening of a trend originating in his first term and partially maintained under President Joe Biden.

Essentially, Trump’s “protectionist” economic policies stem from the belief that the era of free markets and globalization—often termed the “Washington Consensus”—now disadvantages the US.

Trump said in his speech, “Foreign trade and economic practices have created a national emergency,” arguing that the US has now achieved “economic independence” and that his goal is to bolster the US’s international economic standing and protect its workers.

Trump’s executive order contends that the US’s large, persistent annual trade deficits have hollowed out the manufacturing sector, disincentivized the expansion of advanced domestic manufacturing capacity, weakened critical supply chains, and increased the defense industry’s reliance on foreign adversaries.

Trump emphasized that the trade imbalance has fueled a large and persistent deficit in both industrial and agricultural goods, shifted production overseas, “empowered non-market economies” like China, and ultimately harmed the American middle class and small towns.

The order stated, “These tariffs are intended to address inequities in global trade, bring manufacturing back home and spur economic growth for the American people.”

Trump highlighted the decline in the US share of global manufacturing output, noting it fell to 17.4% in 2023 from 28.4% in 2001. He said, “The decline in manufacturing output has reduced US manufacturing capacity. The need to maintain a robust domestic manufacturing capacity is particularly acute in advanced sectors such as automobiles, shipbuilding, pharmaceuticals, transportation equipment, technology products, machine tools, and basic and fabricated metals, where the loss of capacity could permanently weaken US competitiveness.”

In this context, the presidential order lists the “Golden Rules of the Golden Age” as follows:

— Access to the US market is a privilege, not a right.

— The US will no longer put itself last in international trade matters in exchange for empty promises.

— Reciprocal tariffs were one of the main reasons why Americans voted for President Trump; they were a cornerstone of his campaign from the start.

— Everyone knew that he would push for it as soon as he took office; it was exactly what he promised and it was one of the main reasons why he won the election.

— These tariffs are at the center of President Trump’s plan to reverse the economic damage left by President Biden and put America on the path to a new golden age.

— This plan is part of a broader economic agenda focused on energy competitiveness, tax cuts (including eliminating taxes on tips and Social Security benefits), and deregulation aimed at increasing US prosperity.

Declaration of the bankruptcy of the post-World War II order

He said, “For decades, our country has been looted, pillaged, raped and plundered by friend and foe alike, by nations near and far. Foreign crooks have looted our factories and foreign scavengers have torn apart our once beautiful American dream.”

He also saluted the American steelworkers, autoworkers, farmers and artisans in the audience.

Trump said, “I think this is one of the most important days in American history. This is our declaration of economic independence.” He argued that for years, “hard-working Americans” were sidelined while other nations prospered, but now it was the US’s turn. “Today we stand up for the American worker and finally put America first,” he added.

The President declared in a speech infused with American dream rhetoric, “April 2, 2025 will forever be remembered as the day American industry was reborn, America’s destiny was reclaimed, and we began to make America rich again.”

US embassies issue ultimatums to European companies

Even before the tariff announcement, the Trump administration took steps impacting US trade relations, extending beyond typical commercial diplomacy.

Last week, the Trump administration reportedly attempted to compel European companies to adhere to specific US domestic policies, an action highlighted by a letter sent from the US embassy in France to French businesses.

The letter, sent by the US Embassy in Paris to dozens of major French companies operating in the US, was first reported on Friday by the French business daily Les Echos.

According to reports, the letter stated that Executive Order 14.173, aimed at ending “unlawful discrimination” and restoring “merit” in business, is “equally binding on all suppliers and service providers to the US government,” including French companies, irrespective of their nationality or location of work.

The term “unlawful discrimination,” in the context of the Trump administration’s policy, refers to Diversity, Equity, and Inclusion (DEI) programs, which the administration has moved to dismantle within the US and is now reportedly pressuring foreign companies to abandon.

The letter included a form requesting that affected companies detail their plans for implementing the executive order.

The Financial Times (FT) reported on Friday that US embassies in Belgium and several Eastern European countries sent similar letters to companies in those nations.

The US initiative provoked strong reactions. The French Trade Ministry said in a statement late last week, “US interference in the inclusion policies of French companies is unacceptable.” The ministry asserted that French law, including regulations on inclusion, continues to apply within France.

On Monday morning, French Trade Minister Laurent Saint-Martin expressed his “deep shock” and cautioned against violating French laws and “values.”

Patrick Martin, President of the French business association Medef (Mouvement des entreprises de France), previously stated that abandoning existing inclusion rules was “out of the question.”

Amir Reza-Tofighi, President of the CPME (Confédération des petites et moyennes entreprises), described the move as an “attack on the sovereignty” of France and urged relevant parties to “stand up together” against this US pressure.

The action also drew protests in Belgium. Minister Maxime Prévot called the stance in the US letter “deeply regrettable” and declared that Belgium “will not back down an inch” regarding the principle of social diversity.

Washington’s attempts to compel European nations to adopt specific US regulations are not entirely unprecedented. For years, the US has employed extraterritorial sanctions—coercive measures requiring compliance from companies in third countries to avoid penalties.

What distinguishes this instance, however, is the administration’s attempt to impose domestic regulations—specifically those concerning DEI, which are contentious within the US itself and potentially divisive in Europe—onto European companies.