Trump Announces 'Reciprocal Tariffs' Plan Will Target All Nations This Week

What Happened?

President Donald Trump announced that his 'reciprocal tariffs' plan will target all other countries when unveiled on Wednesday.

Many are bracing for a significant amount of pushback, causing much uncertainty in the market.

President Trump emphasized to reporters on Air Force One Sunday that the new tariffs would not only target the top 10 or 15 U.S. trading partners.

Another round of sweeping tariffs has caused much stock market disruption over the potential economic impact and the lack of advance clarity.

All three major indexes fell sharply Monday morning which has reportedly followed falls seen in Asia and Europe.

The United Kingdom is also expected to be hit by the measure despite efforts to formulate a deal to exempt British goods.

According to BBC News, the prime minister's official spokesman said talks on an economic deal with the U.S. have been ‘constructive’ but are likely to exceed past April 2.

Import tariffs of 25% on cars and car parts will come into effect.

Why it Matters

The European Union had delayed its first retaliatory levies against the U.S. over Trump's steel and aluminum tariffs.

An EU spokesperson told CNBC that waiting until mid-April allowed extra weeks for negotiations with Washington.

But the spokesperson said that change did not diminish the impact of their response for retaliation of up to 26 billion euros.

The EU previously announced duties on U.S. goods worth $28 billion after the Trump administration's tariffs on metal imports.

A 2018 tariff measure by the EU was reportedly proposed to be brought back.

Trump suggested a 200% tariff on all wines, champagnes, and alcoholic products out of France and other EU countries would be implemented as possible retaliation.

Experts believe a 'tit-for-tat' escalation could easily get out of hand.

Trump scaled back for one month on products that aligned with the USMCA Trade Agreement.

He also extended the same auto tariff courtesy after meeting with the leaders of three major U.S. automakers.

However, the president’s primary goal is to shift more production to the U.S.

Once the one-month delay expires, Trump has pledged to implement reciprocal actions on all major U.S. trading partners, including allies.

Doubled tariffs on Chinese imports remain in place as China implemented retaliatory measures on a wide array of U.S. farm exports.

Ontario Premier Doug Ford told reporters that Canada would not remove any of its retaliatory tariff measures unless all the U.S. tariffs were removed.

How it Affects You

There's a chance some measures could do more harm than good amid inflation, consumer costs, and damage to key ally relationships.

Trump views these measures as 'fair' and aims to eliminate trade imbalances after vowing to reduce a $131.4 billion U.S. trade deficit.

Economists worry that the chances of a recession within the next 12 months have risen amid Trump's tariff policies.

The president said his tariff moves would cause 'a little disturbance,' but he wouldn't rule out the possibility of a recession.

U.S. businesses have also been warned of a tough road ahead if this Trump administration strategy continues.