Global Supply Chains Brace for Impact as Trump Tariffs Kick In

Earlier this month, on April 2, a day he called "Liberation Day", US President Donald Trump signed an executive order imposing a minimum 10% tariff on all US imports, with limited exceptions. Also, imports from 57 nations and entities will face higher tariffs, ranging from 11% to 50%.

The additional tariffs - which Trump claimed are reciprocal and aimed at countering unfair trade practices - have stunned governments and business leaders worldwide, and have resulted in significant volatility in global financial markets.

Starting 9 April, around 80 countries will be subject to even higher tariff rates, which were determined by a specific calculation.

According to the White House, “Made in America” is not just a tagline - it’s an economic and national security priority of this Administration. The President’s reciprocal trade agenda means better-paying American jobs making beautiful American-made cars, appliances, and other goods."

Meanwhile, Trump said on Monday: "The European Union has been very, very bad to us, they don't take our cars, like Japan in that sense, they don't take our agricultural product. They don't take anything practically."

Trump added that the EU's trade deficit would "disappear quickly" if European countries purchased American energy. The same was voiced by Trump during Indian Prime Minister Narendra Modi's to the White House last month.

So are these tariffs an underhanded push for the economies of the world to buy more American oil?

Even as the ‘baseline’ tariffs came into effect at US seaports, airports and customs warehouses, stock markets plummetted across the world.

Moreover, on April 9, as Trump’s higher “reciprocal” tariff rates of 11% to 50% are due to take effect, European Union imports will be hit with a 20% tariff, while Chinese goods will be hit with an additional 34% tariff, bringing Trump’s total new levies on China to 54%.

At the moment inventories from cars to heavy machinery are beginning to pile up at ports across the world and many manufcturers are adopting a "wait and watch" approach hoping to strike a deal with the self-proclained king deal maker, Donald Trump.

For its part, China has responded by announcing 34% tariffs on US imports.

Head honchos of US industry have been cautiously criticising the tariffs as anti-trade and detrimental to the US economy. Home Depot co-founder Ken Langone blasted Trump’s tariffs, calling the 46% import duties on Vietnam “bullshit” and describing the 34% tariff rate on China as “too aggressive, too soon.”

For importers, goods loaded onto a vessel at the port of loading and in transit on the final mode of transport before the reciprocal tariffs take effect will not be subject to the baseline or country-specific ad valorem tariffs (as applicable).

Articles and derivatives of steel and aluminum that are already subject to Section 232 tariffs are excluded. Automobile and automobile parts that are subject to Section 232 tariffs at the time of import are also excluded.

Where these tariffs will leave world's US$115 trillion economy by the end of this year is anyone's guess but world trade volumes are more than likely to take a major hit over the next few months.

Read More: Air Cargo Tonnages Up 3% in First Quarter of 2025 Ahead of New US Tariffs