Trump imposes record tariffs to reshape American trade policy

In April 2018, sweeping tariffs were put in place by President Donald Trump, marking a significant shift in the U.S. trade policy aimed at revitalizing American manufacturing. The tariffs started with a 10 percent baseline on all U.S. imports announced on April 2, followed by additional levies set to take effect on April 9, targeting nearly 90 countries. The administration took this drastic step in response to what President Trump described as America's unfair treatment by various nations over decades, creating an imbalance in trade. Tariffs were particularly heavy on Chinese goods and involved levies on imports from Canada and Mexico, with the hopes of forcing negotiations to level the playing field for U.S. manufacturers. As news of the tariffs spread, global markets reacted negatively with major stock indexes worldwide reporting steep declines. The Nikkei 225 in Japan saw a drop of 7.8%, while Hong Kong's Hang Seng experienced an even more severe plunge of 13.2%, the worst since the 1997 Asian financial crisis. In mainland China, the Shanghai Composite index fell 7.3%, and Taiwan's Taiex recorded its largest loss ever at 9.7%. European stock markets followed suit, with Germany's DAX and France's CAC 40 indices both down by 5.8%. These drastic measures, described by analysts as a game of chicken, prompted immediate retaliatory action from China, which announced a 34% tariff on all U.S. imports starting on April 10. This move, along with a 15% tax on American agricultural products that had already been put in place, raised fears of an escalating trade war. Economists warned that these tariffs could lead to rising inflation and decreased consumer spending, ultimately hindering economic growth. Over the prior week alone, indices such as the S&P 500 and Dow recorded significant declines, with the markets losing upwards of 14% and 12% respectively since the announcement. Trump's administration continued to express optimism regarding future negotiations with targeted countries, stating that representatives from various nations were coming to Washington to discuss trade agreements. Despite this, the uncertain nature of tariffs and potential market reactions left both investors and consumers on edge, with many concerned about the long-term effects on America's economy and global trade relationships. The consequences of these tariffs had begun to unfold with the potential for prolonged economic strain as fears grew over the implications of the U.S. entering a drawn-out trade war.