Trump's world-changing tariffs go into effect
Add Axios as your preferred source to
see more of our stories on Google.
President Trump holding up a signed order in the Rose Garden. Photo: Andrew Harnik/Getty Images
President Trump's sweeping attempt to reorder the global economy went into effect early Wednesday, with historic tariffs on dozens of countries.
Why it matters: Trump says it'll revitalize the U.S. economy and bringing about a fairer global order. Economists and executives say it'll fracture global alliances and lead to a painful recession.
Driving the news: At 12:01 a.m. ET Wednesday, the U.S. began charging reciprocal tariffs on about 60 countries, on top of the baseline 10% tariffs it started collecting last Saturday.
- Long-time allies like the European Union get a 20% tariff, while crucial manufacturing locales like Vietnam and Cambodia end up in the high-40% range.
- And then there's China, which already had a 20% tariff due to the fentanyl trade, and then got a 34% reciprocal tariff, and then an extra 50% more for retaliating against the U.S. levies — a 104% tariff in total.
Zoom out: The levies are almost universal, but some products are expected to be hit harder than others.
- The worst affected by the highest new tariffs in almost a century are video games, computer parts, smartphones, clothing and aerospace parts.
- The Yale Budget Lab estimates the tariffs will reduce the disposable income of the average American household by about $3,800 a year — though that's an average, and in reality the tariffs will effectively be a regressive tax on the poorest families.
- People have been rushing to stock up on cars, iPhones and even basic groceries before the tariffs kicked in.
Between the lines: Global financial markets have had four historically brutal trading days since Trump's April 2 announcement.
- Investors lost trillions of dollars in a wipeout that parallels only the 1987 market crash, the 2008 global financial crisis, and the 2020 onset of COVID.
- The market is caught up in massive uncertainty, compounded by a growing chorus suggesting the entire tariff formula was calculated incorrectly and may have set the rates far too high.
- Billionaire investor Bill Ackman, a staunch Trump supporter, warned of "economic nuclear winter" if the tariffs took effect.
What to watch: How long they actually last.
- Treasury Secretary Scott Bessent said Tuesday that 70 countries have reached out to the White House seeking to make trade deals.
- It wasn't immediately clear how soon those talks would happen, what outcome the White House would seek in them, or whether other countries will be amenable to what's on offer.
Go deeper... Scoop: A dozen House Republicans mull defying Trump on tariff bill
