On April 2, a day he called “Liberation Day,” President Donald Trump signed an executive order imposing a minimum 10% tariff on all U.S. imports. During his “Liberation Day Speech,” he called this action a “declaration of economic independence.”
According to NBC News, Trump announced a 20% tariff on products from the European Union, a 34% tariff on Chinese imports on top of others already imposed and a 46% tariff on products from Vietnam.
Trump has also used tariffs as a negotiating tool to force concessions from countries, for example, threatening Colombia with a tariff if it didn’t accept deportation flights of its citizens.
Following these threats, many countries, such as Canada and China, are imposing their own tariffs in retaliation. China alone retaliated with 84% tariffs on American products as of April 9.
In response to China’s retaliatory tariffs, Trump threatened to impose 50% more tariffs on Chinese goods. He has since expressed no plan to rescind his tariffs or back out of this trade war.
Similarly, the European Union is preparing to deploy its own tariffs on American products.
In a post on X, Ursula von der Leyen, president of the E.U.’s executive branch, said that the union would be willing to employ a “zero-for-zero” approach. This would mean all tariffs from both sides would be appealed.
However, both she and the E.U. trade commissioner, Maros Sefcovic, made it clear that European officials were preparing to deploy tariffs on the United States if the two sides could not reach a deal.
Meanwhile, discontent in the country continues to grow as the S&P 500, the benchmark U.S. index, has fluctuated since these tariffs were imposed.
“The S&P 500, which is 17.6 percent below its February peak, was close to tumbling into a bear market,” said The New York Times.
Bear markets occur when prices in a market decline by more than 20%. This decline is often accompanied by negative investor sentiment and a weakening economy.
Jerome H. Powell, chair of the Federal Reserve, expressed his concerns about the market declining into a bear market.
“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said in an interview with The New York Times.
On the morning of April 9, Trump said he would halt the implementation of his tariffs for the next 90 days in order to make way for new talks with foreign nations. However, he expressed that this break did not include China.
Instead, he raised tariffs on its imports to 125% on top of the previous 20% after Beijing announced an 84% tariff on U.S. imports. Two days later, China raised its tariffs to 125%.
Shortly after Trump announced he would pause most of his “reciprocal” tariffs for 90 days, the S&P 500 rose more than 9%. Additionally, multiple countries and the European Union have responded by delaying their retaliatory tariffs for the 90-day pause.
Ultimately, with no resolution in sight and global markets bracing for further turbulence, it is unknown how this global trade war will continue to play out.
Dee Cohen is a junior majoring in English literature and minoring in French.
