U.S. President Donald Trump’s steep new tariffs on imports officially took effect early Wednesday, marking a major escalation in the ongoing global trade war. Chinese goods are hit the hardest, with a total tariff rate now reaching a staggering 104%, shaking global markets and prompting strong reactions from world leaders.
The latest round of tariffs includes increased levies on products from the European Union, Japan, and other countries. The new rates began at 12:01 a.m. Eastern Time (0401 GMT) on Wednesday, adding to the already growing economic strain.
Tariffs Target China as Trade Tensions Deepen
Trump’s administration has focused heavily on China, the U.S.’s biggest economic rival. Since his return to office, multiple waves of tariffs have been implemented. Initially, a 34% tariff was placed on Chinese goods. But after Beijing responded with its own 34% levy on U.S. products, Trump raised the rate by another 50%.
This brings the total tariff on Chinese goods to 104%, including levies introduced earlier this year.
Despite the pressure, China has shown no signs of backing down. Officials in Beijing have promised to fight the trade war to the end, with retaliatory tariffs of 34% on U.S. goods scheduled to take effect at 12:01 a.m. local time Thursday (1601 GMT Wednesday).
U.S. Aims to Cut Deals With Allies
In a speech Tuesday, Trump said his administration is working on “tailored deals” with countries like Japan and South Korea. His top trade official, Jamieson Greer, told lawmakers that Argentina, Vietnam, and Israel have already offered to lower their tariffs in return.
At a dinner with Republican allies, Trump said countries were “dying” to make deals, boasting that some foreign leaders were “calling us up kissing my ass.”
While critics called the comments undiplomatic, Trump maintained that the strategy is part of a plan to bring manufacturing jobs back to America. He said the U.S. is now “taking in almost $2 billion a day” through these tariffs.
Markets React With Sharp Losses
Global markets responded negatively to the new tariffs. In Asia:
- Hong Kong stocks dropped over 3%
- Japan’s Nikkei fell by 2.7%
- Taiwan’s stock market plunged 5.8%
Ahead of the European market open, stock futures signaled further declines. Currency markets also suffered:
- The South Korean won hit its lowest level since 2009
- China’s offshore yuan sank to a record low
Analysts say China’s central bank is allowing the yuan to slide in a slow, controlled way. However, Stephen Innes, a market strategist, warned that “letting the yuan grind lower at this measured pace won’t offset the blow from a full-blown tariff barrage.”
Oil and Other Commodities Decline
Energy markets also felt the pressure. The price of West Texas Intermediate crude oil fell below $60 per barrel, marking its lowest point since April 2021.
Experts say fears of a global slowdown, triggered by worsening trade disputes, are weighing heavily on commodities across the board.
Europe and Canada Respond
The European Union is urging calm. In a call with Chinese Premier Li Qiang, European Commission President Ursula von der Leyen stressed the importance of avoiding “further escalation” in the trade dispute.
In response, Li said that China is confident it can maintain steady economic growth, despite the mounting pressure.
Meanwhile, Canada confirmed it will move forward with tariffs on certain U.S. auto imports starting Wednesday. The EU is also preparing its own response to the U.S. tariffs. Sources say the bloc may soon announce up to 25% tariffs on American goods such as soybeans and motorcycles.
Business Community Voices Concern
Not all American business leaders support Trump’s tough stance. Billionaire entrepreneur Elon Musk criticized White House trade advisor Peter Navarro, calling him “dumber than a sack of bricks” after Navarro labeled Tesla as merely “a car assembler” reliant on cheap foreign parts.
Many economists also warn that higher tariffs could drive inflation, hurting everyday Americans. They argue that while Trump’s goal is to shift manufacturing back to the U.S., such changes may take years—if they happen at all.
