Trump rolls out expansive global tariff agenda

President Donald Trump announced a substantial expansion of his tariff agenda, a key component of his plans to reshape much of the U.S. economy, announcing country-by-country tariffs and a 10% across-the-board tariff rate on all imports. The tariffs appear to be cumulative, meaning they stack on top of previously existing tariffs; for instance, tariffs on Chinese products would increase to at least 54%, due to stacking of prior tariff actions with yesterday’s announcement.

Key insights:

• Trump orders an across-the-board 10% tariff hike
• Additional country tariffs tied to trade deficits
• 25% tariffs on non-USMCA-covered Canadian, Mexican products to continue

The baseline 10% tariff takes effect at 12:01 a.m. EDT., April 5, while higher country-specific tariffs on approximately 60 countries will fall into place at 12:01 a.m. EDT on April 9.

Here are some the new tariff actions announced as part of the Trump administration’s new “reciprocal” tariff push:

• 20% on European Union imports
• 34% on Chinese imports
• 46% on Vietnamese imports
• 32% on Taiwanese imports
• 24% on Japanese imports
• 26% on Indian imports
• 25% on South Korean imports
• 36% on Thai imports
• 31% on Swiss imports
• 32% on Indonesian imports
• 24% on Malaysian imports
• 49% on Cambodian imports
• 30% on South African imports
• 37% on Bangladeshi imports
• 17% on Israeli imports
• 17% on Filipino imports
• 10% baseline on all imports unless otherwise higher

Though the tariffs were labelled “reciprocal” to trade barriers, they appear to be largely calculated off the current trade deficit that the U.S. has with each country, which has been confirmed by the Trump administration. A full country-by-country list of the administration’s new import duties can be found here. Imports from some major trade partners like the United Kingdom, Brazil and Singapore appear to only be subject to the baseline 10% tariff rate.

"We will supercharge our domestic industrial base, we will pry open foreign markets and break down foreign trade barriers,” Trump said April 2 while announcing the new 10% baseline and country-by-country tariffs. “Ultimately more production at home will mean stronger competition and lower prices for consumers."

Through the tariffs, the administration aims to incentivize the purchase of more U.S. products by escalating U.S. import taxes on foreign products from these countries of origin. Trump and his senior advisors have also argued that these duties are necessary to entice U.S. companies to onshore more production and supply chain activity and to offset lost revenue from lower-income tax rates and increased income tax incentives.

Below is a list of tariff actions and announcements taken by the Trump administration prior to the new tariffs announced April 2.  

• Additional 20% across-the-board tariffs on Chinese imports
• 25% across-board tariffs on “non-U.S.-Mexico-Canada Agreement (USMCA)-compliant” Canadian and Mexican imports (except for 10% tariffs on imported Canadian energy and potash)
• 25% tariffs on steel and aluminum imports, regardless of country of origin
• 25% tariffs on non-USMCA-covered automobiles effective April 3; 25% tariffs on automobile parts no later than May 3
• 25% secondary tariffs “may be” imposed on countries importing Venezuelan oil (China being a major example)
• Investigations into 25% tariffs on copper, lumber and timber and related derivative products, with effective dates expected later this year

Trump has also suggested additional industry or product-specific tariffs, like 25% tariffs on semiconductors and pharmaceuticals, though he has not formally begun the process for that possibility in the same way that he has on copper, lumber and timber and their derivatives. Products from these sectors were exempted from the announcement April 2 due to expected additional action specific to these types of products, and a different legal authority used for those types of tariffs versus the country-by-country ones. 

Analysis

The administration has indicated they expect lower tariffs and non-trade barriers on U.S. exports and trillions of dollars in revenue on imports that could be used to offset domestic tax cuts, aims that appear to conflict with each other.  Whether tariffs remain in place long-term remains to be seen, and this dynamic adds uncertainties for businesses. Further, it appears that internal debates over long-term trade strategy continue within the Trump administration. However, Trump has stated he is committed to a long-term restructuring of the U.S. economy through these actions, even if they cause disruption in the short-term.

Uncertainty over the approach within the administration also appeared to break through into public view in the lead-up to the rollout, as there were several reports and administration official statements about either baseline tariffs or country-by-country ones. In the end, the administration opted for both. Likewise, there may be continuing debate over using tariffs as a permanent revenue measure versus a negotiating tactic.  While there has been optimism that the Trump administration’s tariff threats would be a negotiating tactic, CNBC quoted a White House official as saying, "This is not a negotiation, this is a national emergency." Trump himself has repeatedly referred to the tariff rollout as “Liberation Day.”

In a March 30 televised interview, Senior Counselor to the President for Trade and Manufacturing Policy Peter Navarro said “We’re going to raise about $100 billion with the auto tariffs alone.” Navarro added, “In addition, the other tariffs are going to raise about $600 billion a year, about $6 trillion over a 10-year period,” arguing that pending tax legislation, which has largely focused on avoiding scheduled increases in personal income tax rates set in place by the 2017 Tax Cuts and Jobs Act (TCJA), would make up the difference in household checkbooks.   

From an economic impact standpoint, the Congressional Budget Office (CBO) expected tariffs to increase inflation about 40% above the current personal consumption expenditure inflation level of 2.5% annually (though the office expects the inflationary effect to be transitory) and decrease the office’s expectation of 1.9% economic growth in 2025 by 32%, to an expected 1.3% economic growth this year. The tariffs announced by Trump exceed 10% on average after the administration’s actions, meaning that the impact will be greater than the CBO’s estimates. The CBO also stressed that while its preliminary analysis provided a sense of direction and scale of impact, it was “very uncertain” about its estimates because the U.S. has not implemented tariffs of this size in over 50 years, and accounting for the impact of retaliatory actions is especially difficult.

The tariffs also (indirectly) fit into the major tax and spending debate occurring in Congress this year.  The reconciliation process Republicans plan to use to pass an extension of the expiring portions of the TCJA, plus potentially more tax changes, requires that they not increase the deficit outside a decade-long budget window. While executive actions – like the current tariffs put in place by the Trump administration – cannot legally be counted as a revenue offset for tax cuts (or maintaining lower rates), Republicans could see additional tariff revenue as a means to support a deficit increase within the 10-year window that aligns with what they expect the administration to collect from 10 years of tariffs. Trump and other cabinet officials have tied tariffs to lower tax rates already, arguing that the import consumption taxes would offset the cost of lower income tax rates.

Senate Republicans hope to advance a new budget resolution vehicle for those tax rates later this week, or before leaving Washington for Easter recess. Senate Republicans revealed an updated version of their budget vehicle for tax and other economic policy on April 2, though it’s unclear whether that will be the final draft from them. Having certainty from the White House over its broader tariff escalation could help fill in a major blank spot in that exercise.

Whether the tariffs stay in place long enough to raise that amount of revenue ꟷ or can collect that much if purchasing behavior and production shift as much as the administration says it wants them to, remains unclear.  Due to laws delegating trade authority to the presidency, Trump can impose or lift tariffs with the stroke of a pen. Navarro’s hawkish rhetoric is consistent with the general tenor of the administration around trade. Whether some of the administration’s aggressive trade maneuvers will hold up against both political and legal reaction remains to be seen.

As congressional Republicans weigh how to (indirectly) incorporate revenue from tariffs into the year’s major tax and economic package, any tie between the administration’s tariff policy and continuing significant portions of the TCJA that expire this year could become challenging. Trump’s popularity with Republican voters and rank-and-file elected members has already been crucial for delivering votes in the GOP’s historically narrow House of Representatives majority.

Going forward, voter and market reaction, as well as underlying economic data could influence how far Trump presses forward with his goal to reshape the post-World War II global trade system. Whether the tariff policy is successful or not, new trade deals could be difficult after the U.S. stepped back from several free trade and bilateral agreements, including some renegotiated by the first Trump administration.

Trump’s expansive use of the International Economic Emergency Protection Act (IEEPA) for many of these tariffs could also be subject to legal challenge. Traditionally courts have upheld past presidential IEEPA-related orders because of the presidency’s national security role outlined in the Constitution. But the law has never been used for tariffs before February 2025.

Congressional blowback is also possible. Four Republicans joined Democrats to support a mostly symbolic resolution of disapproval related to Trump’s tariffs on Canadian products. In response to the president’s April 2 announcement, Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Wash., introduced legislation on April 3 to require congressional approval for new tariffs and allow Congress an easier process than currently exists to undo existing ones.

Given the pace of change and significant uncertainty about the future of global trade, businesses should remain agile and prepared to pivot. Businesses should continue to focus on robust scenario planning, evaluating the impact of these developments on their existing supply chains and considering alterative plans to ensure continued efficacy.  Businesses should be considering, at a minimum, how these trade developments will impact: