Trump announces global reciprocal tariff plan: 34% for Chinese goods and 20% for the EU trigger market shocks

US President Trump announced the implementation of the "Global Reciprocal Tariff" policy on April 2., claiming that the move is aimed at revitalizing American industry and ending the "plunder of the American economy." The new tariff measures cover several major trading partners, and the specific tax rates include:

• Chinese product: 34%

• EU goods: 20%

• Taiwan products: 32%

• Vietnamese products: 46%

• Swiss product: 31%

• British and Brazilian products: 10%

• Japanese, Korean, and Indian products: 24%-26%

• Cambodian products: 49%

(Image source: REUTERS – Leah Millis)

Core Policy Termsinclude:

• Set up all import goodsMinimum 10% tariff standard

• The tax rate is determined based on the current tariff level of trading partners on US goods (for example, Switzerland imposes a 61% tariff on the US, and the US imposes a corresponding 31% tariff)

• In 2024, the total import volume of the United States will reach$3.3 trillion, more than France's annual GDP

• The new tariffs will not apply to products that Trump has already levied separately, such as steel, aluminum, and automobiles and their parts. In addition, energy products and "certain minerals that are not produced in the United States" will also be exempted.

• The United States will impose a tariff of 25% on all foreign-made imported cars. The auto tariffs will cover cars, light trucks, engines, transmissions, lithium-ion batteries, and smaller parts such as tires, shock absorbers and spark plug wires. The tariffs on auto parts will be imposed no later than May 3.

Immediate market reaction: The dollar fell against the euro after the policy announcement1%, traders worried that the U.S. economy could slow.

Political controversy:

Trump called the policy "Declaration of Economic Independence"and"Liberation Day”, while House Democratic leader Jeffries criticized it as “The beginning of a recession”.

Economic disputes:

• Trump claims tariffs are "The magic wand to revive industrialization”, which can balance the trade deficit and fill the fiscal deficit

• Economists warn of possibleInflation risk, and questioned the feasibility of achieving "American self-sufficiency" in the context of globalized production chains

The policy continues Trump's admiration for 19th-century U.S. protectionist policies, but its impact on the 2024Import volume exceeds 3 trillion US dollarsThe direct impact remains to be seen.