U.S. customs agents started enforcing President Donald Trump’s new 10 percent tariff on imports from many countries this past Saturday. This tariff is part of a broader trade policy that aims to change how the U.S. interacts with its trading partners. The initial tariff affects a wide range of goods, with even higher rates set to kick in for 57 larger trading partners in the coming week.
The 10 percent tariff began at 12:01 a.m. ET, marking a significant shift from the traditional system of agreed-upon tariff rates that has been in place since World War II. Kelly Ann Shaw, a trade lawyer and former White House adviser, described this move as the most significant trade action in recent history. She believes tariffs will likely change as countries negotiate for lower rates.
Trump’s announcement of the tariffs sent shockwaves through global financial markets, erasing $5 trillion in stock market value for companies in the S&P 500 over just two days. The news caused oil prices and other commodity values to drop, as investors sought the safety of government bonds.
The first countries impacted by the new tariff include Australia, Britain, Colombia, Argentina, Egypt, and Saudi Arabia. A bulletin from U.S. Customs and Border Protection indicated that there would be no grace period for shipments already in transit when the tariff took effect. However, cargo that was loaded before the deadline and on its way to the U.S. has a 51-day grace period, provided it arrives by May 27.
Starting at the same time on Wednesday, Trump is set to introduce even higher "reciprocal" tariffs, ranging from 11 to 50 percent. The European Union will face a 20 percent tariff, while goods from China will be hit with a staggering 34 percent tariff, bringing the total tariffs on Chinese imports to 54 percent.
In response, China announced its own countermeasures, including a 34 percent tariff on American goods and restrictions on some rare earth minerals. Trump claimed that China would feel the brunt of these tariffs, stating that the U.S. would ultimately prevail in what he called an "economic revolution."
World leaders are reacting quickly to the situation. Israeli Prime Minister Benjamin Netanyahu is expected to meet with Trump soon to discuss the tariffs affecting goods from Israel, which will face a 17 percent tariff. Meanwhile, Japan is also seeking to engage with the U.S. as it faces a 24 percent tariff.
Vietnam, which has benefited from U.S. supply chains moving away from China, will face a 46 percent tariff but is reportedly discussing a deal with the Trump administration. The head of Taiwan’s National Security Council is in Washington for talks on the tariffs affecting Taiwanese products, which will face a 32 percent duty.
Canada and Mexico are currently exempt from these new tariffs, as they are still dealing with a separate 25 percent tariff related to the fentanyl crisis. Trump’s administration has also released a list of over 1,000 product categories that are exempt from the tariffs, including crude oil, pharmaceuticals, and semiconductors.
As this trade situation continues to unfold, it is clear that the economic landscape is shifting dramatically, and many countries are bracing for the impacts of these new tariffs.