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.

Chinese automaker BYD saw its vehicle sales increase by 58% in the first three months of the year, presenting a stark contrast to the ongoing decline in demand for Tesla’s electric vehicles across Europe.

The Shenzhen-based group announced on Tuesday that it delivered 986,098 passenger vehicles in the first quarter. Of these, 416,388 were pure electric vehicles, marking a 39% increase. Enjoying a strong start to the year, BYD’s annual sales surpassed $100 billion for the first time, boosted by a resurgence in demand for hybrid vehicles within its domestic market.

Meanwhile, analysts have issued warnings that Tesla’s first-quarter deliveries, anticipated this week, are likely to show a decline exceeding 10%. This prediction comes as sales in France and other key European markets continued to fall in March, even following a significant model update.

Norway offered a glimmer of hope. The new Model Y, launched in the first week of March, reclaimed its position as the country’s best-selling car after experiencing two months of sharp decline. Vehicle registrations in Norway recovered substantially following a 48% drop in February, decreasing by only 1% to 2,211 vehicles in March.

Tesla began delivering the upgraded Model Y, its most popular model, in China at the end of February and rolled it out across Europe starting in early March. Despite this, official data released on Tuesday revealed that new car sales in France plummeted by 37% year-on-year in March, down to 3,157 vehicles. Similarly, sales in Sweden experienced a significant drop of 64%, falling to just 911 units.

Tesla sales have faced a considerable downturn in Europe since the start of the year. According to the Financial Times, analysts remain divided on the primary cause, debating whether the slump stems mainly from public reaction to CEO Elon Musk’s pronounced involvement in regional politics or from an aging product lineup.

Even before the release of March’s sales figures, analysts were already revising down their forecasts for Tesla’s first-quarter deliveries, which are typically announced around the second day of April.

Last week, Deutsche Bank reduced its forecast by approximately 50,000 vehicles, bringing the estimate down to 345,000 units. This figure represents an 11% decrease compared to the same period last year. In contrast, RBC Capital Markets anticipates deliveries reaching 364,000 units.

In a note, Deutsche Bank analyst Edison Yu remarked, “Beyond the numbers, we feel that there has been some brand damage in Western Europe and pockets of the US or Canada due to Elon Musk’s political activities, which is hurting demand.”

Tesla vehicles and dealerships have reportedly become targets of protests in both the US and Europe. This follows Musk’s unprecedented engagement in European political discourse and perceptions of his significant influence within the White House sphere.

Many believe Tesla is well-positioned among automakers to navigate potential tariff conflicts initiated by Donald Trump, largely due to its substantial manufacturing presence in America. Nevertheless, the company remains exposed to risks, as it sources a portion of its vehicle components from international suppliers outside the US.

The company recently issued a warning, suggesting that Trump’s proposed tariffs could potentially trigger retaliatory tariffs against the US. Such a scenario could increase the cost of manufacturing vehicles within America, impacting Tesla’s operations.

A federal judge ordered the Trump administration to preserve chats conducted by senior officials via the Signal messaging app, including messages mistakenly shared with a reporter earlier this month concerning an imminent military operation in Yemen.

US District Judge James Boasberg issued the ruling on Thursday at the request of a transparency group that sued, alleging the app’s auto-delete function risked destroying the messages in violation of the Federal Records Act.

During a brief afternoon hearing, Justice Department lawyer Amber Richer told Boasberg such an order was unnecessary because the relevant agencies were already taking steps to preserve the records. However, she did not object to the judge reinforcing this with a court order.

“We are still in the process of working with the agencies to determine what records they have, but we are also working with the agencies to preserve the records they do possess,” Richer said.

However, the government lawyer appeared to acknowledge a court filing made earlier in the day by a Treasury Department official, which suggested that Treasury Secretary Scott Bessent currently possesses only a portion of the message chain related to the Yemen strike.

The journalist added to the message chain, The Atlantic editor Jeffrey Goldberg, reported that the chat began on March 11. Yet, Bessent only has messages starting from the afternoon of March 15. It remains unclear why Bessent failed to preserve the earlier messages or whether other senior officials in the chat retained them.

Richer stated to Boasberg, “I want to note that we are still determining what records the agencies possess.”

The Atlantic published parts of the messages earlier this week and the remainder on Wednesday after the White House stated it did not consider the exchanges classified, even though they described the scope and timeline of a military operation that had not yet occurred.

According to The Atlantic‘s report, national security adviser Mike Waltz, who initiated the exchange, had initially set the messages to auto-delete after one week but later changed the duration to four weeks.

Speaking from the bench, Boasberg ordered the defendants in the case—Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Director of National Intelligence Tulsi Gabbard, and CIA Director John Ratcliffe—”to preserve all Signal communications between March 11 and March 15.”

This directive appears broader than just the messages shared with Goldberg; it could encompass other Signal messages sent or received by the officials during that period.

A Pentagon lawyer also submitted a written declaration stating the Defense Department was attempting to preserve these records as well but did not claim any records had been recovered. The administration suggested that The Atlantic‘s publication of the entire exchange, except for the redaction of a CIA officer’s name, ensured the messages’ preservation.

At the start of the hearing, Boasberg also responded to a social media post by President Donald Trump suggesting the judge had improperly gained control of the politically sensitive case.

Trump had called it “shameful” that the judge, an appointee of former President Barack Obama, was handling multiple legal cases involving the White House in recent weeks. In addition to the Signal case, Boasberg is presiding over a case involving Trump’s efforts to rapidly deport people using the Alien Enemies Act.

Boasberg addressed the matter, stating he “understood some questions had been raised” about how the court assigns cases. He explained that for the 15 active judges serving on the court, cases are randomly assigned across various categories in nearly all instances “to ensure a more even distribution of cases.”

Clerks use an electronic deck of cards within each category to determine which judge receives a newly filed case.

“That is how it works, and that is how all cases continue to be assigned in this court,” said Boasberg, who has served as the court’s chief judge since 2023.