On 2 April 2025, President Trump announced a comprehensive set of tariffs, marking "Liberation Day" and targeting key trade partners such as China, the UK, the European Union, Japan, and South Korea. These tariffs include a 10% baseline on all U.S. imports, a 20% tariff on EU goods, and an initial 34% tariff on various Chinese imports.
In retaliation, several of America's trading partners imposed tariffs on U.S. exports, with China leading by initially imposing a 34% tariff on U.S. goods. This escalated to an 84% tariff on U.S. goods, while the U.S. imposed tariffs up to 145% on Chinese imports. the EU, Japan, and South Korea also announced surcharges on U.S. products.
Following the announcement on 10 April, most U.S. tariffs are paused for 90 days, excluding those on China and certain imports. This initially caused financial markets to plummet, reminiscent of the COVID-19 pandemic's impact. Although the pause has led to some market recovery, concerns about a trade war with China persist.
In this article, we explore the rationale behind this major shift in U.S. trade strategy, assess its potential impact on businesses, and suggest steps to mitigate any adverse effects.
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