President Donald J. Trump has declared a national emergency to counter trade imbalances and economic vulnerabilities. His executive order enforces tariffs aimed at strengthening the U.S. economy and supporting domestic industries.
The plan includes a 10% baseline tariff on all imports to the country effective April 5, with additional tariffs on several of its biggest trading partners, including:
- China: A 34% tariff on imports has been announced. China has stated that it will implement countermeasures if these tariffs are enforced.
- European Union: 20% tariffs. Furthermore, and before Liberation Day, the EU has countered U.S. tariffs on steel and aluminum with retaliatory tariffs on U.S. products like whiskey and motorcycles.
- India: 27% import tariffs. India faces higher export costs following the revocation of its special trade status while also imposing tariffs on U.S. goods.
In the graph below, you can find the list of proposed tariffs:
Source: https://www.reuters.com/markets/wealth/global-markets-tariffs-graphic-pix-2025-04-02/
Mexico’s Tariff Exemption
Despite new U.S. tariffs, Mexico and Canada remain exempt under the USMCA. Economy Minister Marcelo Ebrard emphasized that both countries enjoy a 0% tariff rate, distinguishing them from other trade partners.
President Claudia Sheinbaum credited this exemption to strong U.S.-Mexico relations, reinforcing Mexico’s diplomatic efforts. However, discussions continue on existing tariffs for key industries. Vehicles and auto parts now face a 25% tariff that is not compliant with the USMCA rules of origin, while aluminum and steel imports are taxed at the same rate.
This doesn’t mean entirely good news for Mexico, as vehicles and autoparts are the main exported finished goods, with its principal destination being the United States. More than 80% of Mexico’s total exports go to the United States.
Furthermore, it is considered that around 50% of total exports are not considered as originating goods according to the provisions established in the USMCA.
Mexico’s government has stated that it aims to secure better terms while navigating global trade shifts.
Global Markets Response
- S. Stock Market: The Dow Jones Industrial Average plummeted over 1,200 points, marking one of its steepest declines in recent history. The Nasdaq fell by 5.1%, and the S&P 500 declined by 3.66%. Companies heavily reliant on global supply chains were particularly affected.[1]
- International Markets: European stock indexes experienced broad-based declines, with the UK’s FTSE 100, France’s CAC 40, and Germany’s DAX all falling by approximately 3%. Asian markets mirrored these losses, reflecting deep concerns over the potential global economic impact. [2]
- Currency and Commodities: According to several sources, commodities such as gold saw price increases, while oil and bitcoin prices declined, indicating heightened market uncertainty
The global economy is bracing for the impact of Trump’s “Liberation Day Tariffs.” While countries like Mexico seem to benefit from tariff exemptions, it still faces important tariffs, and others face disruptions. Nations will need to adapt quickly to minimize economic impact and navigate the growing protectionist landscape.
[2] The Guardian & WSJ