Global financial markets were jolted on Friday following U.S. President Donald Trump’s announcement of a sweeping new wave of tariffs on exports from nearly 70 countries, sparking international concern and a flurry of negotiations aimed at avoiding deeper trade disruption.
Under a presidential order issued this week, new import duties ranging from 10% to 41% will come into effect within seven days. Key U.S. trading partners have been hit with steep rates: 35% on Canadian goods, 50% on Brazilian exports, 25% on Indian products, 20% for Taiwan, and 39% for Switzerland. Goods from countries not explicitly listed in the order will face a flat 10% tariff.
The measures mark a sharp escalation in the Trump administration’s ongoing efforts to reshape global trade, pushing the United States’ average effective tariff rate to approximately 18% — up from just 2.3% last year, according to Capital Economics.
The announcement triggered a wave of volatility in markets. European shares dropped early, with the Stoxx index down around 1% and heading for its worst weekly performance since April. Futures on the Nasdaq and S&P 500 also fell by roughly 1%.
Although the market reaction was less severe than in April when the first round of tariffs was introduced, economists warn that the costs are already being felt. U.S. Commerce Department data released Thursday showed prices for home furnishings and durable goods rose by 1.3% in June, the sharpest increase since March 2022.
Global Pushback and Negotiations
Several affected nations said they are seeking talks with Washington to lower their tariff burdens.
Switzerland, facing one of the highest rates at 39%, said it would push for a negotiated resolution. “These tariffs are arbitrary and lack a rational basis,” said Stefan Brupbacher, head of Swissmem, the country’s manufacturing lobby.
In Asia, Taiwan’s President Lai Ching-te said the 20% tariff on Taiwanese exports was “temporary,” expressing hope for a revised deal. India, meanwhile, is in talks to mitigate the impact of a 25% duty that could affect $40 billion in exports.
Canadian Prime Minister Mark Carney condemned the 35% rate imposed on his country’s goods, especially those linked to fentanyl-related restrictions, vowing to defend Canadian jobs and explore export diversification.
Southeast Asian countries saw more favorable outcomes, with tariffs reduced from earlier threats. Thailand, now facing a 19% rate instead of 36%, welcomed the reprieve. “It boosts investor confidence and maintains our global competitiveness,” said Finance Minister Pichai Chunhavajira.
Australia’s 10% rate remained unchanged, giving its exporters a relative advantage in U.S. markets.
Economic Concerns Grow
Despite adjustments for some, analysts caution that the overall impact will be negative for global growth. “There are no real winners in trade conflicts,” said Thomas Rupf, CIO Asia at VP Bank.
In Europe, winemaker Johannes Selbach voiced concern over the knock-on effects for businesses on both sides of the Atlantic. “Jobs and profits are at risk,” he warned.
Trump defended the tariffs as necessary to correct trade imbalances and align foreign policies with U.S. national interests. A separate order granted Mexico a 90-day reprieve from a planned 30% duty to allow for further trade talks, underscoring the administration’s carrot-and-stick strategy.
The European Union, meanwhile, secured a 15% blanket tariff agreement with the U.S., with officials touting it as a stabilising force for transatlantic trade.
Still, as the August deadlines for China and others approach, global markets remain on edge — and the Trump administration shows no signs of easing its protectionist push.
