Joshua Kurlantzick
On President Donald Trump’s much-touted April 2 “Liberation Day,” he unveiled a range of potentially debilitating “reciprocal” tariffs on the United States’ major trading partners—and most other countries as well. Surprisingly, some of the countries facing the highest tariffs after the April announcement were U.S. partners in Asia, such as Japan, South Korea, and Vietnam; Vietnam, a huge trading partner, was hit with a 46 percent “reciprocal” tariff. Trump also put tariffs on Cambodia—a whopping 49 percent for one of East Asia’s poorest countries—and even Australia, a critical security ally that has a trade surplus with the United States.
What’s behind Trump’s proposed tariff policy?
After the bond markets dropped precipitously in response to his initial “reciprocal” tariffs, Trump temporarily paused many of the higher tariffs on countries other than China. The U.S.-China tariff-raising contest that has since followed has led to both countries placing more than 100 percent levies on the other’s products and goods.
Despite delaying many of his “Liberation Day” plans, Trump has not wiped out all tariffs. His remaining near-universal 10 percent tariffs on virtually all imports, combined with the massive duties on China, have created the highest average U.S. tariff rate since 1901, when tariff battles grew and later contributed to the Great Depression. U.S. consumers and companies now face roughly 28 percent tariffs on imports overall. This is in stark contrast with the 2 percent average tariffs during President Joe Biden’s administration.
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