Overview of Tariffs
On April 2nd President Trump signed an executive order putting at least a 10% tariff on all things imported to the US, a day he called Liberation Day. A tariff is defined as taxes on goods from foreign countries. Some of the highest tariffs include 84% on China, 50% on Lesotho and Saint Pierre, and 49% on Cambodia. According to CBS News, “China’s 84% rate includes the initial 34% reciprocal tariff announced by President Trump on April 2, as well as an additional 50% tariff he later added to the country’s goods.” He expected that these tariffs would be better for the US economy and facilitate growth, but they do not seem to be having that effect.
Stock Market Crash
Trump’s tariffs have already had significant effects on the economy. Take the stock market for example. Many investors pulled out of the market out of fear following Trump’s tariffs. US stocks were definitely hit the hardest, but the whole market is facing trouble. So many investors have pulled out this past month that Yahoo Finance said, “It could even evolve into a full-blown crash in 2025.” A stock market crash like this has only happened twice in the past 20 years: the 2008 financial crisis and the 2020 Covid crash.
Effect on Global Economy
But the stock market isn’t the only part of the economy feeling the impact. The whole global economy seems to be slowing down due to trade tensions. Before the tariffs, the International Monetary Fund predicted the global economy would grow 2.8% throughout this year. After the tariffs were announced the US prediction dropped to 1.8%. There has also been a decline in other countries’ exports, which negatively affects their economies. South Korea, for example, has had a 5.2% decrease in all exports compared to April of last year. They saw this decline directly following the 25% tariff Trump enacted on certain metal and auto imports from the country. Steel and auto shipments dropped around 7% and 9%, and overall exports to the US fell around 14% from previous years.
Temporary Pause
It seems as though some of the backlash from the media and other countries caused Trump to reconsider, because on April 9 he put a three month pause on most of the tariffs. This was confusing to many because he had been so steadfast on keeping these tariffs because of his belief that it would help the US economy. The pause will be lifted on July 8, 2025. This gives foreign countries plenty of time to negotiate lower tariffs, which Trump has stated he is very open to doing.
Trade War
Not all countries were granted a 90 day pause. China currently has a 145% tariff on all exported goods, to which they retaliated with a 125% tariff on US goods. Trump was angry with China for fighting his tariffs so he refused to pause the taxes. This has resulted in a trade war between the countries. Some Chinese factories are pulling production on US exports for the time being, which could be detrimental to both economies. If China stops trading with the US many people would lose their jobs, prices would escalate, and supply chains would be disrupted. It is said that Trump and Chinese president Xi Jinping have been talking and negotiating, but nothing has been finalized or publicized.
Conclusion
In conclusion Trump’s tariffs have been, and will most likely continue to be detrimental to the global economy. Prices have already begun to skyrocket. It is said that the price of eggs may hit $8 in the near future. This is the opposite of what Trump campaigned for and promised the people who elected him. States like Texas, who usually votes red, have already called for his impeachment, but nothing has been decided yet.
Works Cited:
- Trump announces 90-day pause on ‘reciprocal’ tariffs with exception of China. (2025, April 9). CNN. Retrieved May 1, 2025, from https://www.cnn.com/2025/04/09/business/reciprocal-tariff-pause-trump/index.html
- Yahoo Finance. (n.d.). A 2025 Stock Market Crash. https://uk.finance.yahoo.com/news/2025-stock-market-crash-2025-063100981.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAI0GLZe4Yj9s5qHcf61xTRQhyrCc723CNsbcEarahsZEktYUQJauVKQdtqBSH_MtIMQZg-MJ99nvIdQc_FKzyVWXB2p2BqlRg
- Buchwald, E. (2025, April 22). Want evidence Trump’s tariffs are upending the global economy? Here it is. CNN. Retrieved May 1, 2025, from https://www.cnn.com/2025/04/22/economy/tariffs-trump-global-economy-evidence/index.html
- What are tariffs, how do they work and why is Trump using them? (2025, April 23). BBC. Retrieved May 1, 2025, from https://www.bbc.com/news/articles/cn93e12rypgo
