In April 2025, U.S. President Donald Trump announced new tariffs at a White House briefing, proclaiming it as America's "economic declaration of independence" and referring to the move as a long-awaited "day of liberation." Which countries and products are targeted, what are the motivations, and how has this decision affected the global economy? Below, we examine the scope of these tariffs, their underlying reasons, and impacts on traditional and cryptocurrency markets, along with expert insights.
Countries and Products Affected:
General Tariff (Base Rate): The U.S. imposed a basic 10% import tariff on nearly all countries starting April 5, 2025. Nations such as Turkey, the United Kingdom, Brazil, Australia, Egypt, and Saudi Arabia are among those affected by this base rate.
Higher Tariffs on Select Countries: Countries with significant trade deficits, described as the "biggest offenders," face even steeper tariffs. European Union countries face a 20% tariff, China 34%, Vietnam 46%, Thailand 36%, Japan 24%, India 26%, South Korea 25%, Taiwan 32%, Switzerland 31%, Malaysia 24%, Indonesia 32%, Cambodia 49%, South Africa 30%, and Bangladesh 37%. These tariffs are set to take effect from April 9. This group, labeled the "dirty 15," accounts for the largest U.S. trade deficits.
Exemptions: Interestingly, Mexico and Canada were exempted from these tariffs, due to economic integration under the USMCA agreement.
Special Product Category - Automobiles: An additional 25% tax has been imposed on automobile imports from all countries, significantly affecting major exporters such as the European Union, whose car exports to the U.S. reached 46.3 billion euros in 2024.
Trump’s Rationale: Economic and Political Reasons
Trump justified the tariffs through economic nationalism and combatting "unfair trade practices." Highlighting America's 1.2 trillion-dollar trade deficit in 2024, Trump described the situation as an emergency threatening national security. Utilizing powers under the International Emergency Economic Powers Act (IEEPA), Trump aims to shift manufacturing back to the U.S., claiming tariffs would generate approximately 600 billion dollars annually, creating domestic jobs and reviving the manufacturing sector. Trump also emphasized reciprocity, noting that tariffs respond to higher rates already imposed by China and the EU.
Global Market Reactions
Trump’s tariffs caused sharp declines in global stock markets. European markets, particularly export-oriented economies like Germany’s DAX and the pan-European Stoxx Europe 600, recorded significant losses. London's FTSE 100 index also fell as investors anticipated a trade war scenario.
Commodity markets similarly felt the impact, with oil prices declining sharply, Brent crude oil dropping below $65 for the first time since August 2021. Industrial metal copper experienced its largest single-day decline since July 2022, indicating expectations of a global economic slowdown. Investors moved towards safer assets like U.S. government bonds, with the yield on the two-year U.S. treasury bond falling below 3.50%, a two-and-a-half-year low. Demand for safe havens like gold also increased, and the dollar strengthened against emerging-market currencies.
Cryptocurrency Market Effects
Cryptocurrencies, traditionally seen as alternative investments, mirrored the general market sell-off. Bitcoin dropped sharply from nearly $88,000 to around $82,000 after Trump’s announcement. Altcoins and crypto-related stocks were also negatively impacted. MicroStrategy shares fell by 7%, Coinbase lost 6%, and Robinhood shares dropped by 9%. Analysts noted that Bitcoin, contrary to expectations, failed to act as a "digital gold" safe haven during the initial turmoil, aligning instead with risk-averse behavior. However, potential long-term inflationary pressures could reignite demand for Bitcoin and similarly scarce digital assets.
Expert Opinions: Concerns and Predictions
Economists expressed concerns about the broader economic impacts. Oxford economist Clarissa Hahn warned that U.S. consumers would ultimately bear the increased costs, potentially driving inflation higher. Mark Zandi, chief economist at Moody’s, similarly predicted negative impacts on lower and middle-income Americans due to higher living costs, while wealthier individuals could suffer from stock market losses. Zandi suggested that these measures could significantly slow economic growth, possibly even triggering a recession.
On a global scale, experts questioned the future of free trade. Takahide Kiuchi from the Nomura Research Institute stated that Trump’s tariffs might threaten the post-World War II global trade framework. Turkish economist Mustafa Sönmez criticized the tariffs as unsustainable protectionism incompatible with global capital flows, warning they could generate significant inflation and economic turmoil in the U.S. economy.
