By: Rimi
Published on: Apr 04, 2025
In a move that sent tremors through the global economy, U.S. President Donald Trump announced sweeping tariffs on international imports, causing markets worldwide to slide dramatically. The shockwaves mirrored the financial turmoil last seen during the COVID-19 pandemic in 2020. With a minimum import tariff of 10% and rates spiking to 49% for goods from certain Asian countries, the financial community is reeling from what many analysts describe as a seismic policy shift.
This aggressive trade maneuver, dubbed "Liberation Day" by Trump, aims to reassert American dominance in manufacturing and trade, yet it risks upending international alliances and financial stability. Stocks, commodities, and even safe-haven assets like gold tumbled in response. The U.S. dollar weakened, and global currencies reacted with volatility. This article provides a comprehensive breakdown of the event, its implications, and global reactions.
Trump's policy mandates a minimum 10% tariff on all imported goods. However, targeted tariffs soar much higher, especially for countries like China, Vietnam, and members of the European Union. For example, Vietnam faces tariffs as high as 46%, disproportionately affecting its export-driven economy.
This escalation in trade protectionism has incited fears of a global trade war, not unlike the tensions seen between the U.S. and China during Trump's earlier administration. Economists are particularly concerned about its dual impact on growth and inflation—slowing production and consumption while driving up prices.
Asian shares led the market collapse on Friday, with Tokyo’s Nikkei 225 plunging by 4.3% and South Korea’s Kospi falling by 1.8%. Australia’s S&P/ASX 200 dropped 2.2%. Meanwhile, the U.S. dollar weakened against the Japanese yen and euro, signaling a lack of investor confidence.
Currencies React:
USD/JPY: Fell to 145.39 from 146.06
EUR/USD: Rose to 1.1095 from 1.1055
While some markets like Shanghai, Taiwan, Hong Kong, and Indonesia were closed for holidays, their reopening is expected to unleash further volatility.
Chinese trade organizations responded swiftly. The China Light Industry Association condemned the tariffs as a "crude destruction" of the global trade system, blaming the U.S. for destabilizing international manufacturing and violating consumer rights globally, including those of Americans.
The closure of the "de minimis" loophole—which had previously allowed goods under $800 to enter the U.S. tax-free—also came under fire. This move targets low-cost e-commerce giants like Shein and Temu, drastically altering the dynamics of U.S.-China e-commerce.
Vietnamese authorities expressed deep concern. According to Foreign Ministry spokesperson Pham Thu Hang, the tariffs are "not in line with the spirit of mutually beneficial cooperation" established in the 2023 comprehensive strategic partnership between Vietnam and the U.S.
Vietnam exports nearly $120 billion annually to the U.S., accounting for one-third of its total exports. Analysts warn the new tariffs will cripple vital sectors such as electronics, footwear, seafood, and textiles.
Deputy Prime Minister Ho Duc Phoc plans to visit the U.S. in April to discuss possible trade remedies and negotiations.
Taiwanese President Lai Ching-te labeled the tariffs "unreasonable" and pledged robust support for affected sectors. While acknowledging Taiwan's trade surplus with the U.S., Lai emphasized that Taiwanese companies were fulfilling American demand, particularly in high-tech industries.
He instructed Premier Cho Jung-tai to coordinate with industry leaders and stabilize the domestic economy. Taiwan's reliance on IT exports to the U.S. makes it a key player in the unfolding tariff drama.
Economists caution that the new tariffs could trigger stagflation—a combination of economic stagnation and inflation. As tariffs push up the cost of goods and reduce global trade volumes, central banks may find it difficult to maintain balance.
Sectors at Risk:
Technology: U.S. tech stocks took a hit, with Nasdaq futures down sharply.
Energy: Crude oil prices declined amid fears of reduced demand.
Retail: American companies that rely on foreign-made goods may raise prices.
Even gold, traditionally a safe haven, fell from record highs in a surprising twist, showing just how deep the uncertainty runs.
Allies and adversaries alike have condemned the tariffs. The EU has signaled retaliatory tariffs, and Canada is exploring legal options under WTO frameworks. Developing nations in Asia call it "economic bullying," urging global solidarity against U.S. trade aggression.
This erosion of diplomatic goodwill may lead to a fragmented global trade environment, further hampering recovery efforts post-pandemic.
Market Volatility: More shocks likely as global markets adjust.
Supply Chain Disruptions: Higher import costs and delays.
Consumer Price Inflation: American households may feel the pinch.
Political Pushback: Legal challenges and diplomatic standoffs.
As President Trump doubles down on economic nationalism, the global community is left grappling with uncertainty, volatility, and rising trade barriers.
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