With President Donald Trump announcing a massive reciprocal tariff policy targeting countries worldwide on the 2nd, analysts say it marks a significant milestone in transitioning to a ‘new era of protectionism.’ Until now, Trump’s signature ‘tariff bombs’ had targeted specific nations like China, Canada, and Mexico, and specific items such as steel, aluminum, and automobiles. This latest move effectively expands that approach globally.

The reciprocal tariffs announced on this day consist of two components: a universal base tariff and country-specific tariffs. Starting on the 5th, a 10% base tariff will be imposed on all countries worldwide. From the 9th, additional country-specific tariffs will be applied, calculated based on each nation’s tariffs and non-tariff barriers against the U.S. This is considered the most aggressive tariff measure since President William McKinley (1897–1901), dubbed the ‘Tariff King,’ imposed a 50% tariff on all U.S. imports in the 19th century.

As Trump has designated April 2 as ‘America’s Liberation Day,’ this reciprocal tariff policy can be seen as the climax of the tariff war he has waged since taking office. It is poised to be recorded as a symbolic step backward, with the U.S.—once a leader in the globalization wave under the World Trade Organization (WTO) that lowered trade barriers—retreating toward ‘trade protectionism.’

In response to Trump’s tariff announcement, other countries are signaling high-intensity countermeasures. The European Union (EU) has foreshadowed a robust response, adding retaliatory tariffs against the new reciprocal measures to its existing countermeasures on steel tariffs. On the 1st, Ursula von der Leyen, President of the European Commission, stated, “We don’t want retaliation, but we have a strong retaliation plan in place and will act if necessary.” Canada has also declared, “We will not rule out any options,” indicating a tit-for-tat stance. On the same day, Chinese Foreign Minister Wang Yi told Russia’s state-run RIA Novosti, “If the U.S. continues its pressure and intimidation, we will resolutely counterattack.” China has already implemented retaliatory measures on coal, liquefied natural gas (LNG), and agricultural products in response to existing U.S. tariffs targeting it, and reports suggest it is raising the stakes by restricting its companies’ investments in the U.S. However, some nations, like Mexico, are taking a cautious approach, stating they will not immediately impose retaliatory tariffs, likely keeping future negotiations in mind.

Countries like South Korea, which have largely eliminated tariffs through free trade agreements (FTAs) with the U.S., now face a critical choice: join the retaliatory tariff bandwagon or endure the U.S.’s unilateral abrogation of agreements while seeking new deals. For South Korea, a nation heavily reliant on trade, the imposition of a 25% reciprocal tariff rate—higher than Japan’s 24%, despite Japan lacking an FTA with the U.S.—has sounded alarm bells not only for U.S. trade but for its overall trade landscape.

Experts warn that Trump’s tariff war could reshape global trade order while adversely affecting the U.S. economy. The tariffs are expected to reignite inflation, which has weighed on the U.S. economy since the COVID-19 pandemic, ultimately boomeranging back to hit consumers. Investment bank Goldman Sachs has raised its 12-month U.S. recession probability from 20% to 35%.

The biggest challenge with Trump’s tariff war is the difficulty in predicting its ripple effects. In an interview with Reuters on the 31st of last month, IMF Managing Director Kristalina Georgieva said the likelihood of Trump’s ‘tariff war’ triggering a short-term recession is low, but she stressed the need to eliminate uncertainty early. “The sooner we can secure more ‘certainty’ about the situation, the better,” Georgieva said. “Our research shows that the longer uncertainty persists, the more negatively it impacts growth.”

By Reporter Park Hong-yong