President Donald Trump’s decision to impose broad tariffs on U.S. imports has triggered retaliatory threats escalating a global trade war.
The tariffs, announced on 2 April, caused significant market turbulence worldwide and were met with strong condemnation from global leaders, marking the end of an era of trade liberalization that has shaped the global economy for decades.
As announced, Trump’s plan includes a 10% baseline tariff on all imports to the U.S., with higher duties imposed on some of its largest trading partners. As reported by Reuters, China, now facing a 54% tariff on its exports to the U.S. and promised countermeasures, as did the European Union.
Both Washington’s allies and adversaries alike criticized the tariffs, fearing they could severely disrupt global trade.
Among Washington’s close allies, the European Union faced a 20% tariff, Japan a 24% tariff, South Korea a 25% tariff, and Taiwan a 32% tariff. Even small territories and uninhabited islands in Antarctica were subjected to tariffs.
LIBERATION DAY RECIPROCAL TARIFFS pic.twitter.com/ODckbUWKvO
— The White House (@WhiteHouse) April 2, 2025
Moreover, stock markets in Beijing and Tokyo have plunged, while European stocks also saw sharp declines, with Germany, a major goods exporter, hit especially hard.
German Chancellor Olaf Scholz said he believed the latest tariff decisions by Trump were “fundamentally wrong” according to CNBC.
In addition, President of the European Commision, Ursula von der Leyen, noted that the 27-nation bloc was prepared to retaliate if negotiations with the U.S. failed.
I would like to speak to my fellow Europeans ↓ pic.twitter.com/h00KZ1McsY
— Ursula von der Leyen (@vonderleyen) April 3, 2025
U.S. Treasury Secretary Scott Bessent had earlier cautioned that any retaliatory actions would only lead to further escalation.
Furthermore, a slowdown in freight orders became evident, particularly in ocean shipping from China, with the China Containerized Freight Index (CCFI) dropping 28% from the start of the year through the end of the first quarter, according to international shipping association BIMCO.
This marked the largest first-quarter decline in 20 years, with the CCFI typically declining by only 2% on average during the same period since 2006. According to BIMCO’s chief shipping analyst, Niels Rasmussen, the first quarter of 2025 has seen the worst drop in two decades.
Philip Damas, Head of Drewry Supply Chain Advisors also commented that these developments will have significant implications for the future shape of international trade, with stakeholders across the global container shipping industry now reassessing their markets, supply chain, sourcing and service decisions.
The high but uneven level of tariffs will result in both reductions in international trade volumes and in shifts of volumes, with winners and losers.
According to Drewry, the situation is highly dynamic with considerable uncertainty over how those countries most affected will respond or seek to mitigate the full impact of the measures announced.
