Boots on the ground! Trump announces global tariff rate of 10%, global trade system faces impact.

After the U.S. stock market closed on Wednesday, President Trump announced that he would impose tariffs on global trading partners, marking the largest scale impact on the global economic system he has initiated to date. Trump has long been critical of the current international trade system, believing it is unfair to the United States. This move is the latest manifestation of his trade protectionism policy. During a press conference in the White House Rose Garden, Trump stated that the U.S. would impose tariffs of at least 10% on all goods exported to the U.S., and higher rates on countries with the most severe trade imbalances. China, for example, would face a 34% tariff, the EU 20%, and Vietnam as high as 46%. Trump displayed a chart during the press conference, indicating that dozens of countries would face higher tariffs due to trade imbalance issues. Trump said, "For many years, hardworking Americans have been forced to watch as other countries have become rich and powerful, mostly at our expense. But now, it's our time to thrive." Canada and Mexico temporarily exempted, trade tensions persist The Trump administration also announced that Canada and Mexico would temporarily not be included in the tariff adjustments, exempt from the 10% baseline tariffs and also not be subject to reciprocal tariffs against specific countries. However, this exemption is temporary, with the 10% tariffs taking effect only after the 25% tariffs imposed by the Trump administration on Canada and Mexico are removed or suspended. Following the announcement, the Canadian dollar rose 0.5% to intra-day highs against the U.S. dollar. Previously, the U.S. imposed a 25% tariff on imported goods from Canada and Mexico, citing their failure to effectively curb the flow of drugs and crime into the U.S. This policy had led to tensions among the U.S., Canada, and Mexico, and the exemption now provides a buffer period for both countries. "Reciprocal" tariff measures target trade barriers The Trump administration stated that the adjusted "reciprocal" tariffs were calculated based on the tariffs and non-tariff barriers set by other countries on U.S. goods. According to the plan, countries deemed as the "most egregious violators" by the U.S. would face punitive tax rates equal to half the extent of their tariffs and barriers. The full list of tariffs announced by Trump include: China: 34%; EU: 20%; South Korea: 25%; India: 26%; Vietnam: 46%; Taiwan: 32%; Japan: 24%; Thailand: 36%; Switzerland: 31%; Indonesia: 32%; Malaysia: 24%; Cambodia: 49%; UK: 10%; South Africa: 30%; Brazil: 10%; Bangladesh: 37%; Singapore: 10%; Israel: 17%; Philippines: 17%; Chile: 10%; Australia: 10%; Pakistan: 29%; Turkey: 10%; Sri Lanka: 44%; Colombia: 10%. "We're going to charge them about half of what they charge us, and the number is based on what they've been charging us over the years and what they're charging us now," Trump said at the press conference. "So, these tariffs are not 100 percent but they cover all the tariffs, non-tariff barriers, and other forms of unfair trade practices in a combined calculation." Additionally, Trump specifically mentioned Australia in his speech, criticizing the country for banning the import of U.S. beef while exporting $3 billion worth of Australian beef to the U.S. in 2023. "They're nice people, good at everything, but they are not taking our beef. I don't blame them, because they want to protect their farmers, but as of midnight tonight, we're reciprocating the same." Market reaction: U.S. stocks plummet, gold hits new high again As soon as Trump's tariff policy was announced, the financial markets responded strongly. During the post-market trading session on Wednesday, major U.S. stock index-related exchange-traded funds plummeted. The SPDR S&P 500 Trust ETF (SPY.US) fell by 2.2%, while the Invesco QQQ Trust ETF (QQQ.US), which tracks the Nasdaq 100 index, dropped by 3%. New York gold futures hit $3,200 per ounce for the first time, rising 1.73% intraday. Spot gold surged over 0.96%, reaching $3,143.39 per ounce, nearing the all-time high of $3,149.00 set on April 1st, and earlier dropping to $3,105.23 per ounce at 04:14 Beijing time. Global markets in turmoil, economic outlook at risk The international market also reacted strongly to the news, with oil prices briefly dropping after settlement. The U.S. East Coast relies heavily on European fuel imports, and the U.S. also exports crude oil to the countries subject to tariffs, potentially causing chain reactions in the global energy market. Trump also announced that due to the U.S.'s trade deficit exceeding $918 billion with other countries in 2024, he would invoke the International Emergency Economic Powers Act and unilaterally impose tariffs in the name of a national emergency. This is the most comprehensive tariff adjustment the U.S. has made in decades, as the Trump administration aims to revitalize American manufacturing and offset the government's budget deficit with new tariff revenue. However, this policy is also a major economic gamble. Tariff hikes may raise the cost of imported goods, affecting American businesses and consumers, while potentially triggering a global trade war with retaliatory tariffs from other countries, disrupting supply chains, exacerbating inflation, and prompting other economic entities to strengthen cooperation and reduce dependence on the U.S.