Trump tariffs updates: ‘Reciprocal’ levies shake up global trade

Thank you for joining our live coverage of US President Donald Trump’s announcement of sweeping trade tariffs.

You can continue following the story by reading our up-to-date news piece here.

And you can also check out five key takeaways from Trump’s tariffs here.

We also have an explainer here

We’ll be closing this live page soon, so let’s bring you up to speed with the day’s main developments:

• Trump revealed his long-awaited “Liberation Day” trade plan, announcing a baseline 10 percent tariff on all US imports as well as higher duties on dozens of select countries.
• China and the EU promised to roll out “countermeasures” in response, raising fears of an escalating global trade war.
• Global stocks fell sharply as the scale of Trump’s tariffs took many investors by surprise.

Arguably champagne is one of France’s most famous products.

It is exported all over the world and the US is the biggest market for French champagnes.

Producers in this region are extremely concerned about these 20 percent tariffs. We have already been hearing from the head of one of the main champagne houses here, saying that they are really calling on the European Union not to escalate a trade war.

They are worried that Trump could raise those tariffs even higher. They say that this is an industry worth some $2bn a year but they are looking at potential loses of about $800m.

So big losses for producers here and of course the knock-on effects of that for all the people who work in the region and in the industry.

China’s Kaiyuan Securities predicted that gross domestic product (GDP) growth in the world’s second-largest economy could fall by 1.3 percentage points in the face of new tariffs.

The securities broker also said that Chinese exports to the US could fall by as much as 30 percent, and overall exports by more than 4.5 percent.

Trump’s latest round of tariffs added a 34 percent blanket tariff on Chinese goods, on top of 20 percent in tariffs added since he took office in January.

The figure is close to the 60 percent the US president promised last year on the campaign trail.

Zhiwu Chen, a finance professor at HKU Business School, told Reuters that if the tariffs hold, it will be nearly impossible for China to hit its 5 percent growth target for 2025.

“China cannot get out of this deflationary situation any time soon. This new tariff increase is definitely making things worse,” he said.

Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management, described the tariffs as an “an all-round blockade against China”.

More questions about Trump’s tariffs, which hit close ally Israel with a 17 percent reciprocal tariff, while Iran – which does not have formal diplomatic relations with the US – got away with a relatively low 10 percent tariff.

The reason seems to be that the latest round of “Liberation Day” tariffs were calculated based on their trade deficit with the US and exports sent to the US, rather than other mitigating factors like their diplomatic relationship or state of their overall economy.

Israel said earlier this week that it would nix all remaining import duties on US products, but it is still unclear if the US will factor these in. The two countries have a free trade agreement, but there were still some duties on US agricultural goods and a few other exports.

The Reuters news agency reports that world markets have been left reeling due to Trump’s tariffs.

Stock markets have tumbled and investors are dashing to the relative safety of bonds, gold and the yen.

S&P 500 futures dropped 3 percent, suggesting investors expect deep losses when Wall Street opens later today.

US Treasury yields slid and China’s yuan dropped to a seven-week low.

“We will likely see retaliation from Europe but it’s clear countries will think about how to retaliate in a politically astute way,” said Justin Onuekwusi, chief investment officer at the investment firm St James’s Place, in London.

“Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession,” he said.

“We have raised global recession risks to 35 percent from 15 percent,” he added.

Japan’s Daiwa Institute of Research estimated that Trump’s 24 percent reciprocal tariffs could lower the country’s real GDP by 0.6 percent this year, after growing just 0.1 percent in 2024.

Real GDP is similar to GDP, except that it is adjusted for inflation.

The tariff follows a previously announced 25 percent tariff on most vehicle imports to the US, as well as key auto parts, that also went into effect on Thursday.

The car tariff is expected to inflict damage on Japan’s auto industry, which contributes 3 percent of its GDP.

In response, the Nikkei share average fell to an eight-month low on Thursday, wiping out 18.7 trillion yen ($127bil) of market value.

Trump’s sweeping announcement of tariffs on countries around the world was presented as a day of celebration by the White House.

Guests were invited to the Rose Garden for what Trump called a “Liberation Day”.

Using emergency powers, he imposed baseline tariffs of 10 percent on imports from all countries.

Trump said American taxpayers had been ripped off for more than 50 years, and that would no longer happen.

Watch the full report:

The EU is “ready for a trade war” with the US and could “attack online services”, French government spokesperson Sophie Primas said.

“We are pretty sure that we are indeed going to see an adverse effect on production,” Primas told French broadcaster RTL, expressing particular concern about the “strong” impact on French wines and spirits as a result of the US tariffs.

Primas said the EU was preparing a two-stage response, with “an initial response”, to be put in place around mid-April, concerning aluminium and steel.

Then the EU will target “all products and services”, with the measures probably ready at the end of April, she said, adding this was still being discussed.

“We have a whole range of tools and we are ready for this trade war,” she said.

“We are also going to attack services. For example, online services, which are not taxed today but could be,” Primas said.

While estimates are still coming in, the renowned US economist Larry Summers predicted losses of $30 trillion or more from the new round of tariffs – up from a prediction of $20 trillion just hours earlier.

“Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now is closer to $30 trillion or $300,000 per family of four,” he said on X.

Summers previously told Bloomberg that the tariff hikes are set to unleash an “oil crisis-like shock to the economy”.

“This is the kind of thing you discuss in the way we would usually discuss an oil-price spike or earthquake or a drought, as a supply shock,” he said on Bloomberg Television’s Wall Street Week. “The question is mostly how much damage is going to be done.”

Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now is closer to $30 trillion or $300,000 per family of four.

— Lawrence H. Summers (@LHSummers) April 3, 2025

The United Kingdom’s Business Secretary Jonathan Reynolds said Britain is “in a relatively better position” than the European Union, after Trump imposed a lower tariff on the UK than its EU neighbour.

EU imports to the US face a duty of 20 percent while the UK received a tariff half that of its neighbours.

“I recognise the announcements by the president last night put the UK in a relatively better position than, for instance, the EU,” Reynolds told Sky News, adding however that Trump’s 10 percent levy on Britain goods was still “a disappointment”.

Reynolds said that the message he was hearing from businesses in the UK was “remain at the table, don’t overreact” to Trump.

As previously reported, Trump is taxing two uninhabited Antarctic islands among other small islands. Now it appears he has also slapped a 10 percent tariff on the British Indian Ocean Territory, whose main inhabitants are members of the US and UK military.

“Can someone please tell Donald Trump that the only people in the British Indian Ocean Territory are the US base at Diego Garcia? He’s taxing an American military base,” tweeted Oliver Cooper, a member of the UK Conservative Party.

Lying in the Indian Ocean between Tanzania and Indonesia, the territory is an archipelago of 58 islands covering 640,000 square kilometres (250,000 square miles), according to the UK government.

At the present time, its inhabitants number 3,000 people at a joint US-UK base on the island of Diego Garcia, according to the CIA World Factbook.

Can someone please tell Donald Trump that the only people in the British Indian Ocean Territory are the U.S. base at Diego Garcia?

He’s taxing an American military base. pic.twitter.com/TxHBMzl074

— Oliver Cooper (@OliverCooper) April 2, 2025

Thailand’s Prime Minister Paetongtarn Shinawatra says she hopes to bring down the 37 percent tariff rate imposed on Thailand in negotiations with the US.

Reuters reported that Thailand was expecting Trump to impose an 11 percent tariff on the country.

“We have to negotiate and get into details,” Paetongtarn said. “We can’t let it get to where we miss our GDP target.”

Commerce Minister Pichai Naripthaphan said the government was prepared for negotiations and had high hopes they would go well, citing Thailand’s good relations with the US.

Thai economic growth clocked in at just 2.5 percent last year, held back by soaring household debt, and the country is hoping for a modest 3 percent growth this year.

New Delhi has yet to formally comment on Trump’s tariffs, but Ajay Sahai, director general of the Federation of Indian Export Organisations, said it seems to have fared better than other manufacturing rivals despite the addition of a 26 percent tariff.

“The tariffs slapped on India are definitely both high and higher than expected, which will hurt demand for our exports,” Sahai told AFP.

“Many countries which we compete with globally, including China, Indonesia, and Vietnam etc, have been hit harder than us,” he said.

The three countries faces tariffs of 34 percent, 32 percent and 46 percent, respectively.

“That opens up space for us to gain in terms of market share. But at the same time, if more countries retaliate and global trade gets hurt, this isn’t good for anyone,” he said.

Economists and armchair experts have been scratching their heads over how the White House arrived at its latest round of tariffs. While there were predictable blows to East Asia’s manufacturing base and the European Union, high tariffs were also slapped on more questionable locations like uninhabited Antarctic islands.

US-based financial writer James Surowiecki was one of the first to crack the code of what appears to be a relatively simple formula based on numbers alone, rather than other factors.

“Just figured out where these fake tariff rates come from. They didn’t actually calculate tariff rates + non-tariff barriers, as they say they did,” he said on X.

“Instead, for every country, they just took our trade deficit with that country and divided it by the country’s exports to us. So we have a $17.9 billion trade deficit with Indonesia. Its exports to us are $28 billion. $17.9/$28 = 64%, which Trump claims is the tariff rate Indonesia charges us. What extraordinary nonsense this is.”

He also questioned some of the White House figures, as well.

“Even given that it’s Trump, I cannot believe they said ‘We’ll just divide the trade deficit by imports and tell people that’s the tariff rate.’ And then they decided to set our tariffs by just cutting that totally made-up rate in half! This is so dumb and deceptive,” he tweeted.

Just figured out where these fake tariff rates come from. They didn't actually calculate tariff rates + non-tariff barriers, as they say they did. Instead, for every country, they just took our trade deficit with that country and divided it by the country's exports to us.

So we… https://t.co/PBjF8xmcuv

— James Surowiecki (@JamesSurowiecki) April 2, 2025

Among the many confusing tariffs on the list is a 50 percent duty slapped on Lesotho, a small country in sub-Saharan Africa and one of the poorest places in the world.

The US balance of trade with Lesotho is -$234m, according to the US Trade Representative, primarily from textiles, precious stones, and metals.

The 50 percent duty on Lesotho, whose GDP was about $2bn in 2024, is among the highest on the list, raising questions about how the tariff calculations were made.

A user pointed out on X that as a member of the Southern African Customs Union, it should have the same rates as Botswana, Eswatini, Namibia, and South Africa. Lesotho’s tariffs are higher than the 38 percent applied to Botswana, 21 percent to Namibia, and 31 percent to South Africa.

To illustrate just how nonsensically these tariffs were calculated, take the example of Lesotho, one of the poorest countries in Africa with just $2.4 billion in annual GDP, which is being struck with a 50% tariff rate under the Trump plan, the highest rate among all countries on… https://t.co/aiofAhpLF3

— Arnaud Bertrand (@RnaudBertrand) April 3, 2025

It’s been a challenging week for China-Taiwan relations amid the tariff turmoil.

Earlier this week, Beijing launched military exercises around Taiwan in a “stern warning” to Taiwan’s “separatist” President William Lai Ching-te for a speech he made in March blasting China’s political influence operations.

Beijing was also irked by the White House designating Taiwan as a “country” as part of Trump’s tariff announcements. The US hit Taipei with a 32 percent duty and Beijing with an extra 34 percent duty.

“#Taiwan is China’s Taiwan. We will continue to strive for peaceful reunification with the greatest sincerity and the utmost effort, but we will never allow any room for ‘Taiwan independence’ forces in whatever form,” tweeted Xie Feng, China’s ambassador to the US.

The US broke off diplomatic relations with Taiwan – whose formal name is the Republic of China – in the 1970s, but it maintains an ambiguous stance on its current political status.

Washington says both sides of the Taiwan Strait need to resolve the dispute peacefully, and it opposes any “unilateral changes to the status quo from either side”.

#Taiwan is China’s Taiwan. We will continue to strive for peaceful reunification with the greatest sincerity and the utmost effort, but we will never allow any room for “Taiwan independence” forces in whatever form. pic.twitter.com/opz3zUzLRm

— Xie Feng 谢锋 (@AmbXieFeng) April 2, 2025

China’s Commerce Ministry has called this “unilateral bullying”.

It says that the US is disregarding the balance of interests achieved over years of trade – trade that has benefitted the US. And it says the US is not going to solve all of its problems simply by imposing tariffs.

It is urging the Trump administration to come back to the negotiating table. If not, China said it would defend its national interests by taking countermeasures.

If the past is anything to go by, we may not see any retaliation from China until those tariffs are actually imposed by the US on April 9.

But we have seen China respond already to initial tariffs – the 20 percent that the Trump administration put on China earlier this year – and China, as a response, put 10 to 15 percent on some agricultural products from the US.

In addition to the Commerce Ministry statement, we’ve had scathing op-eds and reactions from Chinese state media.

One in particular from Xinhua says this seems to be the US on a “tariff rampage”. It says that this is self-defeating bullying that will only result in higher unemployment in the US and possibly a recession.

Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, says that many trade-reliant Asian economies may be hesitant to retaliate with trade measures of their own.

“I think it will be a mixed picture. Most will not retaliate,” Elms told Al Jazeera.

“A few will do so and others may suggest doing so. An equally important question is whether any will take steps to collaborate or coordinate.”

I think retaliation will be limited in Asia,” she added.

“It’s just not something that gets done. I would argue that we are in totally different times and ideas that would never have been possible in the past are now on the table or should be on the table.”