President Trump's rollout of steep tariffs aimed at allied trading partners on Wednesday sparked international head-shaking and renewed warnings at home about lasting U.S. economic damage.
The president, who says the U.S. is the victim of "economic warfare," imposed what he called reciprocal tariffs on dozens of countries, to be anchored with a new, universal 10 percent tariff floor, applied to longtime trading partners, including the United Kingdom.
Among major economies considered by the administration to be bad actors and therefore hardest hit were the European Union, which will face 20 percent tariffs under the plan, and China, facing an additional 34 percent on top of existing U.S. levies.
A 25 percent tariff on autos manufactured outside the U.S. took effect at midnight.
"Today's tariff announcement is truly mind-boggling. It is so much larger, faster and more poorly thought out than anything I could ever have imagined Trump doing," Harvard economist and former chair of the White House Council of Economic Advisers Jason Furman told Morning Report on Wednesday night.
"The good news is that it will be so destructive to wealth and employment while turbocharging inflation that [the administration] will be forced to pare it back," Furman, who advised former Presidents Clinton and Obama, added. "I am truly stunned."
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Trump said his aim is to rectify inequities with competing nations and international companies, which he said could erase new U.S. tariffs if they choose to manufacture products in the U.S.
"We're going to take care of our people first," the president said during a Rose Garden event with top administration officials, auto and steel plant employees, and a large chart serving as his visual aid. "These tariffs are going to give us growth," he added before signing an executive order that describes foreign trade as a "national emergency."
Trump for weeks teased what he called "Liberation Day" changes by first taking aim at Canada and Mexico, plus China. A tariff exemption for those two North American trading partners expired Wednesday. The total U.S. levy on Chinese imports now exceeds 50 percent.
The president's announcement of new, double-digit U.S. tariffs applied globally reached beyond what many economists, industry insiders, investors and members of Congress said they anticipated.
Economists and tax experts expressed bewilderment over the administration's methodology for calculating what it portrayed as current tariffs against the U.S. Critics predict prices will rise for U.S. consumers and for manufacturers as retaliatory levies land in this country.
Former Vice President Pence, reacting on social media, objected to the announcement and predicted Trump's changes would cost American families more than $3,500 annually. Former Treasury Secretary Larry Summers predicted the resulting cumulative U.S. loss could exceed $300,000 per family of four.
Trump says his strategy will lead to negotiated concessions that will benefit the U.S. and his supporters insist his moves are long overdue.
Shortly after the announcement, financial indexes fell sharply and European markets continued reeling today.
"One of the messages that I'd like to get out tonight is everybody sit back, take a deep breath, don't immediately retaliate, let's see where this goes," Treasury Secretary Scott Bessent told CNN. "Because if you retaliate, that's how we get escalation."
PUBLIC OPINION since January has swung against the president's trade stance, in part because consumers and investors have been wary of inflation, a slowing economy and the new administration's on-again-off-again tariff presentations, which Trump has tied to immigration, border security and fentanyl, plus assertions that a windfall of tariff revenues would make America "rich" and perhaps be rebated to citizens or used to offset lost revenues from GOP-backed tax cuts.
In a February Gallup poll, Americans by a margin of 81 percent to 14 percent called foreign trade more of an economic opportunity than a threat.
Here's a summary of reactions country by country.
▪ European Commission chief Ursula von der Leyen, in a statement today, vowed a unified response to the U.S. tariffs, including preparation of countermeasures. "If you take on one of us, you take on all of us," she said. Negotiations among EU member states are to begin next week (BBC).
▪ Israel had said it would lift all duties on U.S. imports. The move was an apparent bid to try to ensure that Israel was exempt from new tariffs, which it is not (The New York Times).
▪ China restricts companies from investing in the United States as tensions rise (The Wall Street Journal).
"The president is risking a recession with this national sales tax he calls tariffs — while needlessly alienating our closest allies," Sen. Dick Durbin (D-Ill.) warned in a statement. "When American families see what this does to the price of goods, such as cars, groceries, and gas, it is going to create a negative economic force across this country and cost a lot of American jobs."
The Hill: Five takeaways from Trump's reciprocal tariff policies.
Exemptions to the new tariff regime include energy, if not available in the U.S., and certain unspecified minerals. U.S. farmers are not exempted, and the president made no mention Wednesday of specific federal aid to soften the impact on U.S. agriculture.
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