On 2 April, the American leader announced massive measures: basic tariffs of 10% are introduced for all products supplied to the States. For the EU, this figure was raised to 20%, and for China – to 34%. In his speech, the president called 2 April the day when Americans will become rich again. Meanwhile, leaders of other major economies – in Europe and Asia – even before Trump’s speech said they were ready to respond to the US measures. That could mean a global trade war. It would lower global GDP and raise inflation around the world.
What new tariffs Trump is introducing on 2 April
At the speech, he showed a whole table of new tariffs. One of the biggest changes is that the US is imposing a general import tariff of 10% on goods from all countries, Trump said. In addition, charges of 20% on goods from the European Union, 10% on goods from the UK, and 34% on goods from China appear. Trump also imposed 10% tariffs on Heard and McDonald Islands, which are not even a state but part of Australia’s Outer Territories. These islands are one of the most remote land areas on Earth. And most importantly: they are uninhabited. Only penguins live there.
Higher tariffs are directed at those countries that supply more products to the U.S. market than they import from there. The greatest pressure is put on China as the main competitor of the United States on the world market.
Reaction of world markets to Trump’s new tariffs
Announcements of new US tariffs have had a strong impact on global indices. Over the past month, the American S&P 500 fell by 6% to 5633 points, follows from the data of the Trading View platform. European Stoxx 50, which reflects the value of ‘blue chips’ in the region, for March fell by 8% to 5631 points. China’s Shanghai Composite remained almost unchanged and fluctuated around 3350 points.
Amid trade wars, investors no longer believe directly in the US economy. In particular, in the last three months, there has been a net outflow of money from treasuries (US government debt bonds) – in other words, investors are selling them more than buying them, which is an unusual trend.
At the same time, the beneficiary has been gold, which is traditionally considered a protective asset. For the first quarter of 2025, the precious metal’s value rose 18% to $3160 per troy ounce, setting a new record.
Summarising all the above, inflation will accelerate in all countries against which tariffs are imposed, but in the EU it will be more severe due to the growth of defence spending.
