On April 2, 2025, the administration of U.S. President Donald Trump announced the introduction of sweeping import tariffs, causing significant fluctuations on international stock markets and increasing the risk of a new wave of global economic instability. This article explores the background of the initiative, specific parameters of the tariff policy, and its economic and geopolitical implications for both the United States and its major trading partners.
1. Introduction of New Tariffs: Legal and Economic Basis
According to an official statement published on the White House website, baseline import tariffs of 10% on all imported goods took effect in the United States on April 5, 2025. Additionally, the administration introduced so-called “mirror” or “reciprocal” tariffs of up to 50% targeting specific countries. The mirror tariffs became effective on April 9, 2025.
These tariffs essentially function as a tax on imported goods and serve both as a fiscal tool to increase budget revenues and as a method of protectionist trade policy.
The list of countries subject to elevated customs duties is as follows:
- Cambodia — 49%
- Laos — 48%
- Madagascar — 47%
- Vietnam — 46%
- Myanmar — 44%
- Sri Lanka — 44%
- Serbia — 37%
- Thailand — 36%
- Bangladesh — 34%
- Taiwan — 32%
- Indonesia — 32%
- Switzerland — 31%
- South Africa — 30%
- Pakistan — 29%
- Republic of Korea — 25%
- Japan — 24%
- Malaysia — 24%
- Israel — 17%
- Philippines — 17%
- United Kingdom — 10%
- Brazil — 10%
- Singapore — 10%
- Chile — 10%
- Lesotho — 50%
- Saint Pierre and Miquelon (French overseas territory) — 50%
In an official address, President Trump called the signing of the executive order “the beginning of the American industrial revival” and claimed the measures aim to secure national economic growth and reduce public debt.
2. Rationale Behind the U.S. Trade Policy
During his public address, Donald Trump characterized the foreign trade policies of previous decades as unfavorable to the United States. He argued that the country had long been subject to “economic exploitation” by both allies and adversaries.
The main objective of the tariffs, according to the president, is to restructure the trade balance, strengthen domestic industry, and restore fair conditions for international trade.
Special attention was given to the automotive sector, where Trump noted a critical imbalance: while the U.S. maintains tariffs at 2.5%, several foreign states impose tariffs as high as 70%, undermining America’s industrial base.
3. Immediate Consequences: Financial Market Reaction
Financial markets responded to the tariffs with a sharp drop in stock prices. Key global stock indices recorded the following changes:
- DAX (Germany): down 10%
- CAC (France): down 6.5%
- FTSE 100 (UK): down 6%
- Nikkei (Japan): down 9%
- Chinese companies: down 13.74%
- Hong Kong Stock Exchange: down 13.12%
- Nasdaq and S&P 500 futures: down 5.4% and 3.84% respectively
Experts drew parallels with “Black Monday” in 1987, when the Dow Jones lost 22.6%. The U.S. tariffs were the main factor behind the widespread market crash in April 2025.
4. U.S. Economy: Assessing Domestic Risks
Despite protectionist intentions, the impact of the new tariffs on the U.S. economy is largely viewed as negative. Bill Ackman, founder of Pershing Square Capital Management, described the situation as an “economic nuclear winter” triggered by the U.S. administration itself.
Ackman warned that by imposing excessive tariffs on goods from both allies and rivals, the U.S. risks losing its status as a reliable trading partner. Particular concern was expressed over the potential deterioration in the living standards of low-income citizens.
Multinational corporations suffered the most from the market reaction to the tariffs: Nike’s stock fell by 12%, while Dell’s dropped by 20%.
Analysts predict the tariffs will drive up production costs and, consequently, consumer prices. This may reduce demand and fuel inflationary trends.
5. International Response: Positions of Key Countries
Russian Federation
Although Russia was not directly targeted by the U.S. tariffs, its financial markets were indirectly affected. The Moscow Exchange Index declined for 13 consecutive trading sessions — a record drop in terms of duration. As of April 7, it failed to surpass the 2700-point mark.
People’s Republic of China
A 34% tariff was imposed on Chinese goods. In response, the Chinese government introduced reciprocal tariffs and restricted the export of rare earth metals. Later, after receiving a U.S. ultimatum, tariffs on Chinese imports were raised to 104%.
Beijing officially condemned Washington’s actions as a breach of international trade rules and vowed to defend its interests.
Economists stress that escalating tensions between the world’s two largest economies could destabilize the global economic order.
European Union
The EU criticized the new U.S. tariff policy but, unlike China, refrained from immediate retaliatory measures. Internal divisions within the bloc were evident: Germany and France advocated for reciprocal tariffs and investment restrictions in the U.S., while Italy preferred a wait-and-see approach.
Despite the failure of the “zero-for-zero” agreement initiative, the European Commission continues to seek a diplomatic resolution to avoid a full-scale trade war.
Economists warn that the potential losses from a trade conflict would hit export-heavy countries the hardest — primarily Germany, Ireland, Italy, and France.
Conclusion
The large-scale tariffs introduced by the United States in April 2025 had an immediate destabilizing impact on global financial markets and international economic relations. These measures heightened the risk of trade wars, fragmentation of the global trade system, and a decline in trust toward the U.S. as a partner. Meanwhile, the U.S. domestic economy is also facing challenges, including rising prices, a declining stock market, and the threat of reduced consumer demand.