The US tariff rate on all imports is now around 22%, a level last seen over a century ago in 1910. Just last year, the rate was 2.5%. “This is a game-changer, not only for the US economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time,” says Olu Sonola, Fitch Ratings’ head of US economic research.
US President Donald Trump on April 2 made good on his multi-month-long threats and unleashed a universal package of tariffs on any country that did not sing to the Star Spangled Banner.
Certain countries, including Singapore, which runs a trade deficit with the US, will be hit with the baseline rate of 10%. However, for countries that have been selling to the US more than buying, rates will soar much higher, such as with Cambodia’s 49%, Thailand’s 36%, Japan’s 24% and the European Union’s 20%. China, the original target of the trade war since Trump’s first term, is now hit with an effective rate of 54%. Vietnam, which many companies have sought refuge in from a by-now-useless “China+1” strategy, is hit with 46%.
