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President Donald Trump imposed the steepest American tariffs in a century as he steps up his campaign to reshape the global economy, sparking threats of retaliation and a selloff in markets around the world.Trump announced Wednesday he will apply at least a 10% tariff on all exporters to the US, with even higher duties on some 60 nations, to counter large trade imbalances with the US. That includes some of the country’s biggest trading partners, such as China — which now faces a tariff of well above 50% on many goods — as well as the European Union, Japan and Vietnam.“For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense,” Trump said during an event in the White House Rose Garden to unveil the so-called reciprocal tariffs. “Now it’s our turn to prosper.”The move marks a dramatic escalation in Trump’s trade war, one that risks triggering retaliation from other countries and upends calculations for businesses and consumers at home. China and the EU, America’s largest trading partner, both said they were preparing to take countermeasures in response.The US president has embraced tariffs as a tool to assert US power, revive manufacturing at home and exact geopolitical concessions — counter to the decades-old consensus that lower trade barriers help to foster ties among nations and prevent conflicts. Economists say the near-term result of his measures will likely be higher US prices and slower growth — or perhaps even a recession.Global financial markets were hit by a sweeping selloff after Trump’s announcement, with US equity futures slumping as much as 4%.Gold hit an all-time high and the traditional haven Japanese yen soared, while China maintained its daily support of the yuan. Ten-year Treasury yields fell toward the closely-watched 4% level, their lowest since October.Read More: Fear Grips Markets as Trump Tariffs Raise Risks to Global GrowthLess than three months after returning to the White House, Trump has already erected trade barriers that are bigger by some measures than those imposed in the notoriously protectionist 1930s. Bloomberg Economics calculates that the effective tax rate the US now charges on more than $3 trillion of imported goods may climb to around 23% — higher than any point in more than a century.A statement published Wednesday by the United States Trade Representative explained the Trump administration calculated its raft of new tariffs primarily based on existing trade balances. Countries running a trade surplus with the US faced a flat 10% rate regardless, as did nations where trade was roughly even.There’s a small difference in the tariff rates first announced by Trump and more than a dozen of those listed in the annex that accompanied the White House executive order. For countries like South Korea, Myanmar, Pakistan and India, the rates in the annex are about 1 percentage point higher than the initial announcement.The 10% baseline charge on everyone takes effect after midnight Saturday. The higher duties on targeted countries — which replace, rather than add on top of the 10% rate — are due to kick in on April 9, the White House said.Read More: List of Reciprocal Tariffs by CountryFor now, the new measures don’t include Canada and Mexico, which are embroiled in a separate on-and-off tariff dispute with the US. They also won’t apply to some products that are subject to separate duties tied to so-called Sec. 232 investigations such as autos, semiconductors and lumber.The reciprocal tariffs were “much worse than we feared,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics. There’ll be “huge implications for rerouting of trade,” she said.The president, who’s sought to frame his trade plans as a boost for his blue-collar voters, was joined in the Rose Garden by union members and workers from various industries — including a retired autoworker who spoke on stage. Later, Trump brandished large boards during his 48-minute address to display each nation’s new rate.
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Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, the Global Sella follows the announcement that Wall Street and the world had been waiting for four weeks. President Trump is raising tariffs around the world on a day he is dubbed Liberation Day for America.
April second, twenty twenty five will forever be remembered as today American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again.
In remarks from the White House Rose Garden heard here on Bloomberg, the President announced at least a ten percent tariff on all exporters to the US. About sixty nations will see even higher duties. The biggest target of all is China. The President says, Beijing charges the US an effective sixty seven percent rate.
So sixty seven percent, so we're going to be charging a discounted reciprocal tariff of thirty four percent.
I think.
In other words, they charge us we judge m chuge mls. So how could anybody be upset?
President Trump is also slapping higher duties on the European Union, Japan, Vietnam, and more. All together, Bloomberg Economics estimates the effective tax rate on more than three trillion dollars in imported goods could rise to about twenty three percent. That is the highest in more than a century.
Well iven, President Trump's tariffs have drawn a sharp reaction on Capitol Hill. House Minority Leader Hankem Jeffries spoke out even before the president's announcement, this is not liberation Day, It's recession day.
In the United States of America.
That's what the Trump tariffs are going to do, crash the economy.
How's Minority Leader Hankem Jeffries. Republicans are mostly standing behind the president. Ashley Davis is a GEOP. He's strategist and partner at S three Group.
He's ran on this for the last four years.
Really is that he needs to make sure that the other countries are paying what they deserve Republicans strategist Ashley Davis. But not every Republican is on board. Kentucky Senator Ran Paul says tariffs are just another tax on Americans.
Republicans used to be in Conservatives and particularly used to be against new taxes. I don't think it's going to be good for us politically, but it's not good for the country either.
Senator Ran Paul and three other Republicans joined with Democrats on a bill opposing President Trump's tariffs on Canada. The bill is not likely to pass in the House.
Well, Karen, President Trump's historic action risks inducing a worldwide trade war marked by tit for tax strikes. We spoke with Treasury Secretary Scott Besson, who urged other countries not to fight back.
I would advise none of the countries to panic. I wouldn't try to retaliate because as long as you don't retaliate, this is the high end of the number, and I think there could have certainty that this is the number barring retaliation.
Treasury Secretary Scott Besson went on to leave the door open to negotiations, telling Bloomberg quote, We'll see with regard to further talks. You can hear the full interview with Scott Besant on the Bloomberg Talks podcast and watch it on the Bloomberg podcast page on YouTube.
So, Nathan, let's get the reaction from other countries around the world. Our first stop brings US to Asia, where China has been the biggest target of Trump tariffs, and Bloomberg deal Desis joins US from Hong Kong with more Jill.
Yes, well, I think it's a lot to really digest here out of Asia. On the one hand, you do see those really high tariffs on China. This thirty four percent increase that Trump is now putting on China. If you were to take that into tality with all of the other levees that Trump has put on China that the US has put on China over the last several months years, you're looking at somewhere in the neighborhood of the average US tariff on Chinese goods being at least sixty five percent according to some economists. Bloomberg Economics estimates that as a result, that could lead to a one to two percentage point loss to growth in China. So certainly a big metric there that you're really looking at. Of course, we haven't really heard from China yet what their definitive actions will be to counter these tariffs. The Ministry of Foreign Affairs has said that there are going to be measures coming, we're just waiting to see them. But I would draw your attention, Karen too, elsewhere in Asia where you're also seeing incredibly high rates and likely even you know, higher economic shocks. Vietnam, for example, they were hit with a forty six percent tariff in this latest round. I mean, this is a country that you know is incredibly export dependent. They're among the world's most trade dependent nations. Or exports were equivalent to nearly ninety percent of economic output. I think that's why you're seeing such a big market reaction in that particular country today. So, you know, just a couple of examples there, but obviously all across Asia, we're seeing a lot of different economic shocks, just as nations respond to these tariffs that just been announced.
Jill desis with the reaction from Hong Kong. Jill, thank you. Now let's head to Europe get the reaction there. Bloomberg Daybreak, you're a banker. Caroline Hepger is in London with the latest. Good morning, Caroline, good morning, Nathan and Karen.
President Trump called the EU pathetic again and that the block rips off the US, as he imposed twenty percent tariffs on EU goods exported to America. The EU argues that America exports plenty of its services to the block and that it is the biggest single market in the world now. EU trade ministers are due to meet on Monday to discuss their response. Meanwhile, in the early hours this morning, Commissioned President as to Leavondeline warned that US actions would deal a blow to the global economy, and she urged further negotiations.
We have always been ready to negotiate with the United States to remove the remaining barriers to transatlantic trade. At the same time, we are prepared to respond. We are already finalizing the first package of countermeasures in response to tariff's on steel, and we're now preparing for further countermeasures to protect our interests and our businesses.
If negotiations fails, Vonderline speaking there the tariffs could wipe out the growth forecast by the ECB for this year and in twenty twenty six. Markets now see another rate cut in April as likely. Bloomberg Economics sees the tariffs cutting EU goods exports to the US by half in the medium term. By comparison, here in the UK, we were dealt with a bit more leniently, a ten percent tariff. Some including business lobby see it as a benefit from Prime Minister Keir Starmer's pragmatic approach to the White House. The UK Trade Secretary Jonathan Reynolds has told Bloomberg just this morning that Britain is still confident that tariffs will come off, and yet the US is inflicting pain on some of its closest allies. All told, it's more than just an economic shock.
All right, Caroline, thank you well early Trump to targets hitded On in Mexico escaped the new round of tariff announcements. We spoke with Ontario Premier Doug Ford.
I would highly recommend to the Prime Minister not the retaliate and let's carry on a strong relationship. Let's build the aim can fortress American Canadian fortress around both countries and be the wealthiestmans, prosperous, safest two countries in the world.
Ontario Premier Doug Ford, speaking of the Bloomberg's Balance of power. While no new tariffs were announced to other levies Trump has already imposed on Canadian and Mexican goods remain intact.
And Karen Well stocks are selling off around the world. The US has been the hardest hit so far. Let's continue our coverage now with Bloomberg's John Tucker.
John, all right, Nathan, Let's do the biggest losers in the US. These are the companies most exposed in that source a lot of their products from Asia, such as Apple and some of its magnificent seven cohorts of the new tariffs will reach thirty four percent for China. Apple still produces the mudjority of its US OL devices in Chinese factories. India, where Apple's increasingly building iPhones and air pods, that's getting a twenty six percent TEARFF. And then there's Vietnam, where the company now makes air pods, iPads, Apple watches, and max that'll be hit with a forty six percent tax.
Now.
Apple shares this morning in the pre market down close to seven percent. Then there's in Vidia. In Vidia the most actively traded pre market. It relies on China for AI Chip sales of those shares right now down three point three percent. Let's move on to the world's largest footwear and apparel companies also facing a shock to their supply chains. Nike makes many of its sneakers in Vietnam, and Nike shares pre market they are down eight point four percent. Lululemon Athletico, which makes forty percent of its products in Vietnam seventeen percent in Cambodia, tumbled almost ten percent in late trading. Shares of Abercrombie and Fitch, they get thirty five percent of their merchandise from Vietnam A fell seven point seven percent. And then Gap, which buys twenty seven percent of its goods from Vietnamese factories at nineteen percent from Indonesia. That's slid about eleven percent. You know you yor income, John Tucker, Bloomberg Radio.
All right, John, thank you well. Shortly after midnight, US auto import tariffs went into effect. Meanwhile, one industry was spared for now, and Bloomberg Lisa Matteo joins us with the very latest Lisa, Hey there, Karen.
So let's start with the most recent chain, the twenty five percent tariff on US auto imports. Now, it's expected to increase costs and disrupt industry supply chains. But what's more certain auto parts will also be hit with a similar level no later than May third. And this morning you already have Volkswagen already announcing it plans to add import fees to the sticker prices of its vehicles that are shipped into the US. Now, Volkswagen shares down about half a percent. In Germany, you have Ford off about half a percent, General Motors down one percent, Tesla is lower by three percent. Chrysler Parents still land. It was down nearly two percent yesterday. This morning it's up about three tens of percent before the belt. The only good news is at imported cards and parts, will they escape the so called reciprocal tariffs? And speaking of being spared, you have the pharmaceutical sector and won this reprieve from sweeping tariffs. But here's the thing, it may not last long. Sources saying the White House plans to launch an investigation into the drug industry other sectors, and that includes semiconductors and potentially critical minerals, and that could lead to tariffs under the Trade Expansion Act. Now, if we take a look at chairs A Pfizer, they're down about two tens of percent. Eli Lilly off about two percent. Lisa Matteo, Bloomberg.
Radio, Lisa, thank you all. In all, it is an aggressive suite of tariffs from President Trump, and it will significantly complicate the federal reserves job as it struggles to question inflation and avoid an economic downturn. This morning, Morgan Stanley pushed back. It's called for the next FED rate cut to next year. The firm's analysts cite inflation risks arising from tariffs. FED Governor Adriana Kougler says it's appropriate to keep in restraints unchanged until upside risks to inflation abate.
I will support maintaining the current policy BRAID for as long as this upside race to inflation continue, while economic activity unemployment remain the stay.
No, it was FED Governor Adriana Kugler. The Fed's next meeting May seventh.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak.
Good morning. I'm Karen Moscow alongside Nathan Hager, and we continue our coverage on tariffs with a conversation with US Treasury Secretary Scott Messant. He spoke with the Bloomberg Televisions and Marie hor Dern shortly after the tariffs were announced, urging other economies against taking retaliatory steps against the new set of America's retaliatory tariffs. Let's listen in.
What I would say and Marie, I would advise none of the countries to panic. I wouldn't try to retaliate because as long as you don't retaliate, this is the high end of the number, and I think the market could have certainty that this is the number barring retaliation. So we've got a ceiling and then we can see if there's a different floor.
So you sound like you're ready for a negotiation. A number of these partners. Has the European Union, has China? Has India? Have these countries reached out?
Well, they've all reached out, but it's going to be up to President Trump to see what he wants to do. I think the mindset might be to let things settle for a while. Their terrifts or non tariff barriers have been on a long time, so we'll see where it goes from here.
When it comes to China, they have a much higher rate on this list. On top of that, there's still that twenty percent fentanyl tariff rate. Is all of this coming together to be more than a fifty percent tariff rate for Beijing?
Well, yes, I think it is, and I think it's a combination of things. And you know again that I think China said today that solving the fentanyl crisis depends on taking off the fentanyl tariffs, and I'm pretty sure that's not the way the sequencing is going to work. They're exporting the precursor chemicals, and every every day, every week, every month, Americans are dying and it's going to have to stop.
When it comes to places like China, the President has mentioned he's willing to even look at things like TikTok to potentially do a negotiation with them. When it comes to tariffs, I'm sure you're looking at things like the u Wan. What's on the table when it comes to this trade realignment between Beijing and Washington.
Well, we have, we haven't started anything yet. We've been busy with the with the tariffs. I've been busy, as we talked about it earlier. The tax bills going very well. So I think that we will move toward the bilateral relationship with China now that we've done the multilateral tariffs.
Plan for conversations or a trip to Beijing. Nothing eminent when it comes to this negotiation. April ninth, these tariffs come in place, do you plan on having negotiations before that date?
Again, I'm not part of the negotiation, so you know, we'll see. I am sure that there's going to be a lot of calls. I just don't know if they're going to be negotiations.
And that was US Treasury Secretary's god Besson speaking with the Bloomberg TVs and Marie hord Durn after President Trump's tariff announcement. You can hear the full interview on the Bloomberg Talks podcast page and watch it on the Bloomberg podcast page on YouTube.
Nathan Karen, we continue our coverage of these tariffs. We are joined now by Bloomberg News Global Trades are Brendan Murray and Terry Haynes, the founder of Pangaea Policy, for a roundtable this morning after the announcement. Great to speak with both of you, and I'll start with you, Brendan, because even as Treasury Secretary Scott Bessett is framing this as a negotiation, this seems like a really huge start to what could be coming.
Good morning, Yeah, exactly. He said, you know, let's let this paraphrasing, he said, let's let this settle in for a while, so that you know, that doesn't seem like you know, a window for negotiating over the next four or five days. So these tariffs are going to take effect by early next week and countries are going to be scrambling to figure out do we want to retaliate, ratchet up the ratchet up the pressure, or do we want to you know, take a you know, a more negotiating posture and try to work this out. Either way, marcuts don't like it, and economists are marking down their outlook for growth and marking up their outlook for inflation. And you know the aftermath of it here even though President Trump said this is simple, reciprocity is about as simple as it gets, this still creates a lot of confusion.
Terry, How does the negotiation go when the president is starting with this onslaught.
Warning, Nathan, you know, the negotiations in a lot of ways have already started. My understanding in a lot of places is that Secretary of Commerce is the Lutnix team had already been giving wish lists, both tariffs and barriers to different countries who were already kind of parsing that and trying to figure out how they might respond to it, and a lot of countries, I mean major countries, both allies and non aligned, are going to have to frankly work through with their own industries there, whether it be agriculture or machine industries, to figure out exactly what they want to do and how they want to do it. So, you know, I think it's it's correct to say this is not going to magically disappear or be mitigated in the next few days. But all countries have had an advanced warning of what the United States might want and what the kind of the parameters for negotiations will be. So you know the number one, there's that number two. You've seen encouraging responses by a lot of countries. It was encouraged. I mean Canada of course got singled out for special treatment, but you had Premiere Ford on your air last night and he was urging Carneie not to retaliate it all. So you know, you'll have a lot of those kind of responses.
Notwithstanding Canada and Mexico being spared at least this round, Brendan, just about every other country in the world, even some very very small ones, are being targeted in this long list that President Trump showed at the Rose Garden last night. What could the potential impact be for this kind of country by country tariff announcement.
Well, one of the hardest hit regions was South Asia. Countries like Vietnam, Malaysia, Cambodia. These are places where a lot of the sort of lower skilled manufacturing has migrated from China over the past several years. And you know those are places is where you know, close clothes and shoes are made. And so you know, there are stories that we're reporting today about how you know, Nike, you know, you know, Nike tennis shoes and those kinds of things that are made in South Asia, you know are going to be more expensive. The other the other issue is you know electronics, Apple is starting to produce a lot more of their phones in India. India you know, got hit with a tariff in the twenty five percent range, I think, and so you know, if these can't be resolved by negotiation, you know, anytime soon, then you know, consumer prices could conceivably go up. Interestingly, Switzerland was singled out, got a bigger got a bigger tariff level than the rest of the than than the European Union around it. So you know, Rolex watches come next week are going to be about thirty one percent more expensive than they otherwise would be.
Terry, we haven't heard much Republican reaction on Capitol Hill besides the four Republicans who voted with Democrats against Canada tariffs. What do you think the Republican reaction is going to be as these tariffs take a fact.
I think there'll be two things that happened, David, One above board, one below board. The above board will be that there will be some concerns from Republicans from based on the situation in their own states, about making sure that they push Trump to resolve these issues lower tariffs, engage in the negotiations, do whatever they can, and frankly, you know, work with the other the other country as well. That's number one. Number two. I think another impact here is that it lights an additional hotfoot under the administration's broader economic agenda. And you can hear this from a lot of senators. You can also hear from Secretary Vessant, who continues to push the idea that the tax cuts may show up as soon as July or August or September something like that. Now I've got it at eighty percent by the end of the calendar year. But there's an opportunity should everyone wish on the Republican side to move these things along faster, and Besson will also be focusing on that. He has said that he's going to spend a lot of time pushing exactly that that agenda. Think of Bess and broadly, as in twenty twenty five, as Gary Cohne was in twenty seventeen, the guy who's constantly up there goosing things along, trying to make it go as fast as he can.
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