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Trump tariffs latest updates: China hits back with 34% tariffs, stock market in free fall as recession risks rise

Sarah Foster, Bankrate - 9:56 PM ET 4/4/2025 default

China threatened to retaliate with its own tariffs. Stocks fell across multiple indexes by the most in five years. Economists upped their bets that the U.S. economy may soon face a recession, and the Federal Reserve chair said the U.S. central bank is in no rush to cut interest rates.

That caps off one of the most volatile and brutal weeks for the U.S. economy since the onset of the coronavirus pandemic, as consumers, investors, policymakers and economists alike all scramble to process the fallout of President Donald Trump's massive new reciprocal tariffs announced Wednesday.

Learn more: Trump's tariffs are here -- here's who pays

Here's the latest to close out the week:

China says it will hit all U.S. imports with a 34 percent baseline tariff starting next Thursday, if Trump's full 54 percent duty on goods from the nation goes into effect as planned on April 9.
The European Union also said it was prepared to respond with its own measures, but in a "calm, carefully phased, and above all, unified way." In a statement released Thursday, European Trade Commissioner Maros Sefcovic said he'll be exploring countermeasures over the next week.
Fed Chair Jerome Powell said Friday that tariffs are "significantly larger than expected," and their impact on the economy will be, too, bringing even higher inflation and weaker growth. Fed officials are prepared to keep rates at a decade-plus high in the meantime. "It is too soon to say what will be the appropriate path for monetary policy," he said.
The S&P 500 slid more than 11 percent over the past two days. The Nasdaq plunged more than 11 percent, while the Dow Jones Industrial Average fell 9 percent. The selloff that's ensnarled markets since Wednesday has wiped out a record $6.6 trillion in wealth, according to data from Dow Jones.
Economists across Wall Street downgraded their growth forecasts in response to Trump's higher-than-expected tariffs, many warning of a higher possibility of a recession. The odds of a recession surged by the most since 2022 in Bankrate's latest survey of economists.

Learn more: What you should do -- and not do -- with your money under Trump's tariffs

The news about tariffs fluctuates every day. Stay tuned to Bankrate's latest updates to keep informed about what it means for you -- and your money.

Current U.S. tariffs

All products from other countries: 10 percent, plus additional tariffs that are unique to each country
All autos and auto parts coming into the U.S.: 25 percent
All steel and aluminum imports: 25 percent
Any country that imports Venezuelan oil: 25 percent tariff on all goods
Canada: 25 percent on some goods, 10 percent on energy products
Mexico: 25 percent on some imports

Trump slaps minimum 10% tariff on all global imports

President Donald Trump announced on Wednesday his broadest tariffs yet, a move that promises to raise the average U.S. tariff rate to the highest in more than a century.

The Trump administration will soon begin imposing a 10 percent baseline tariff on U.S. imports from all other countries, and will slap even higher duties on countries that have trade imbalances with the U.S. The White House has referred to those countries as "repeat offenders," ones that impose higher tariffs than the U.S. and export more goods than they import.

"For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense," Trump said from a White House address from the Rose Garden. "But now it's our turn to prosper."

Here's a sampling of the new tariffs set to be applied:

China: 34 percent
European Union: 20 percent
Japan: 24 percent
Taiwan: 32 percent
India: 26 percent
Vietnam: 46 percent
Thailand: 36 percent

"As long as you don't retaliate, this is the high end of the number," Treasury Secretary Scott Bessent said in an interview on Bloomberg Television after Trump's address. "So we've got a ceiling. And then we can see if there's a different floor."

For now, Canada and Mexico appear to be exempt from higher duties, with their tariff rates remaining at 25 percent. Steel and aluminum duties will also stay at 25 percent. The new tariff on goods from China, meanwhile, will be in addition to the 20 percent duties that have already been imposed, bringing its total tariff rate to 54 percent, Bessent said.

The Trump administration appears ready to keep all duties in place until other countries address the trade practices that Trump has criticized as being unfair to the U.S.

--Sarah Foster, April 2, 2025

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25% tariffs on imported cars and car parts

President Donald Trump said Wednesday that he plans to impose 25 percent tariffs on all cars and auto parts imports into the U.S., a move he sees as bringing auto manufacturing jobs back to the U.S. -- despite experts' warnings that it could make car prices more expensive.

The new duties will go into effect April 3, according to an executive order.

"I think our automobile business will flourish like it's never flourished before," Trump said from the Oval Office following the announcement.

Americans purchased 16 million cars in 2024, and only 1 in 4 (25 percent) are what the White House categorizes as "made in America." The Trump administration estimates that half of the cars that consumers purchased last year were imported, as were 60 percent of the parts used to assemble them, a White House fact sheet said.

More than 1 in 3 vehicles and vehicle parts that the U.S. imported in 2024 came from Mexico, according to a Bankrate analysis of Census Bureau data. Another 13 percent each came from Canada and Japan, while South Korea composes 12 percent of all imports.

United Auto Workers Union President Shawn Fain celebrated the news in a statement, calling it a "major step in the right direction" for both autoworkers and blue-collar communities in the U.S.

Economists, however, estimate that the tariff hike could amount to massive price hikes. New vehicle prices might rise by about $5,000, on average, over the next 12 months, according to one estimate from Moody's. A separate report from analysts at Goldman Sachs ( GS ) estimated that the price of imported cars could jump from anywhere between $5,000 to $15,000 if the 25 percent levy is kept in place.

Learn more: How tariffs will affect your wallet

Those price hikes could add further insult to injury as Americans already grapple with the double whammy of soaring interest rates and pricey car costs post-pandemic. Since February 2020, new vehicle prices have climbed 20.5 percent, a Bankrate analysis of the latest consumer price index (CPI) shows.

The average price of a new car hit almost $50,000 at the end of December, according to Kelley Blue Book.

"Consumers are paying close attention to the current administration's policies," said Oren Klachkin, financial market economist at Nationwide. "They are fearful another leg up in prices will put more strain on their wallets."

--Sarah Foster, March 27, 2025

25% tariffs on all goods from countries that import Venezuelan oil

On March 24, President Donald Trump signed an executive order lobbing 25 percent tariffs on all goods from any country that imports oil from Venezuela.

Meanwhile, new U.S. tariffs seem all but guaranteed to roll out on April 2. But the specifics -- in terms of which countries, which products and how high the tariffs will be -- are murky. With tariffs, the only thing certain these days is the uncertainty.

Last week, Trump seemed intent on rolling out steep tariffs in April against any country that had instituted retaliatory tariffs against the U.S., in addition to levying new tariffs on cars, aluminum and steel.

But on Monday, Trump softened his tone. "I may give a lot of countries breaks," he said. "It's reciprocal, but we might be even nicer than that."

Still, he repeated his nickname for April 2, calling it "Liberation Day," which refers to his belief that tariffs will free the U.S. from trade imbalances with global partners.

April 2 is also the day when the reprieve on certain goods from Canada and Mexico is slated to end, and 25 percent tariffs on many more products from those countries are scheduled to go into effect. Currently, any products covered by the U.S.-Canada-Mexico agreement are exempt from tariffs.

In other news, consumers' outlook for the future dropped to a 12-year low in March, according to the latest monthly consumer survey, fielded through March 19, from the Conference Board, a nonprofit, nonpartisan research organization.

Specifically, Americans' short-term outlook for income, business, and labor market conditions tumbled lower.

"Consumers' optimism about future income -- which had held up quite strongly in the past few months -- largely vanished, suggesting worries about the economy and labor market have started to spread into consumers' assessments of their personal situations," said Stephanie Guichard, senior economist, global indicators at the Conference Board, in a statement.

Overall, consumer confidence "declined for a fourth consecutive month in March," she said, "falling below the relatively narrow range that had prevailed since 2022."

--Andrea Coombes, March 25, 2025

Tariffs 'tend to bring inflation up,' Fed Chair says

The Federal Reserve left interest rates unchanged at its meeting today, but Fed Chair Jerome Powell highlighted the risks tariffs pose for the economy going forward.

Tariffs "tend to bring growth down; they tend to bring inflation up," Powell said.

As a result of the Federal Open Market Committee's (FOMC) decision today, its benchmark borrowing rate will stay in a target range of 4.25 to 4.5 percent.

Powell also said Trump's latest tariffs are already driving some price increases: "We now have inflation coming in from an exogenous source," Powell said, meaning an external source.

In a statement, the FOMC said the economy has expanded and the labor market seems to be "solid," but added that "uncertainty around the economic outlook has increased."

In a time of economic uncertainty, consumers should consider focusing on what they can control, says Sarah Foster, Bankrate's principal U.S. economy and Federal Reserve reporter. Pay down high-interest credit card debt and do what you can to build up your emergency fund, Foster says.

--Andrea Coombes, March 19, 2025

Reciprocal tariffs, and more, coming April 2, Trump says

President Donald Trump isn't backing down from an all-out trade war, saying he'll launch new tariffs come April 2.

"April 2 is a liberating day for our country, because we're going to be getting back a lot of the wealth that we so foolishly gave up to other countries," Trump said to reporters on Air Force One on Sunday.

Some of the new tariffs planned for April 2 will focus on specific sectors while others will be reciprocal, meaning the U.S. will impose the same tariff that a country has imposed on the U.S., Trump said.

"If they're charging us, we're charging them," he said.

On top of reciprocal tariffs, Trump said he plans to levy new tariffs on cars, steel and aluminum. "We're going to have some additional tariffs" on those products, he said.

Trump ratcheted up his economic threats against the United States' trading partners last week, and Canada and the European Union quickly hit back with their own retaliatory levies.

Tariffs have been a key part of Trump's bigger goal of shifting the burden of funding the U.S. government from American taxpayers to foreign sources. As part of that broader effort, he proposed creating an External Revenue Service, focused on collecting tariffs and other revenue from other countries. Here's what the External Revenue Service could mean for you.

--Andrea Coombes, March 18, 2025

Canada and Mexico economies to be hit hard by tariffs

Trump's relentless trade war is expected to hit Canada and Mexico especially hard, but the U.S. economy will suffer too, according to the latest economic forecast, published Monday, by the OECD, or Organization for Economic Cooperation and Development, a global policy group of 38 member countries.

Mexico's economy will likely shrink 1.3 percent this year and contract 0.6 percent in 2026, a sharp drop from an expected growth rate of 1.2 percent this year and 1.6 percent in 2026, from the OECD's forecast in December.
Canada's economy is expected to grow 0.7 percent this year and next, down from an expected 2 percent growth rate each of those years in the OECD's previous forecast.
The U.S. economy will grow 2.2 percent this year and just 1.6 percent next year, down from a predicted 2.4 percent growth rate in 2025 and 2.1 percent in 2026, according to the OECD.

Learn more: Could Trump's tariffs cause a recession?

The current U.S. tariffs on Canada and Mexico generally are 25 percent, though products that fall under the United States-Mexico-Canada Agreement (USMCA) are exempt for now. Tariffs on goods from China are 20 percent, on top of an already existing 10 percent tariff.

In response to the U.S.'s tariffs, Canada slammed 25 percent tariffs on a variety of U.S. products, including candles, garden umbrellas and fishing rods on March 13. Here's the complete list of U.S. products upon which Canada imposed a 25 percent tariff.

Trump threatens 200% tariff on European alcohol

March has been a particularly volatile month in the burgeoning trade war. On March 13, Trump said on his social media site Truth Social that he'd hit all champagne, wine and alcohol coming from the European Union with a 200 percent tariff, in response to the EU's planned 50 percent tariff on U.S. whiskey.

On March 11, in response to the U.S. imposing 25 percent tariffs on steel and aluminum products from the European Union, the EU said it would impose counter tariffs on almost $30 billion worth of U.S. goods, starting next month.

EU tariffs will hit products "ranging from boats to bourbon to motorbikes," the EU statement says.

Other targeted products include steel and aluminum items, textiles, home appliances, house tools, plastics and wood products. Agricultural products include poultry, beef, certain seafood, nuts, eggs, dairy, sugar and vegetables.

The EU announcement said its tariffs would start April 1 and be fully in place by April 13.

What are tariffs?

A tariff is essentially a tax on imported goods. Governments choose to levy tariffs for a variety of reasons, including protecting domestic industries and punishing other countries for their trade practices.

Trump has talked about tariffs as creating a protective "ring around the U.S. economy" that could bring jobs back. He's also mentioned national security as a reason to institute tariffs -- for example, to push other countries to better guard against drug trafficking.

Tariffs can be levied in different ways, but often they are a simple flat percentage cost that applies to the goods being imported.

Learn more: Trump's tariffs are here -- here's who pays

Who pays tariffs?

Tariffs are paid by the company that imports the product. For example, U.S. tariffs on goods from Canada are paid by U.S. companies that import those goods. However, the company importing the product often passes the cost of tariffs along to the consumers who ultimately buy the product.

How much is passed along, though, depends on a variety of factors, such as competition in a specific industry, demand for the specific product and consumers' preferences.

U.S. households will lose an estimated $2,700 to $3,400, on average, as a result of retaliatory tariffs, according to a recent analysis by the Yale Budget Lab. Before Trump announced plans for retaliatory tariffs scheduled for April 2, the Yale Budget Lab estimated that tariffs would cost U.S. households an average of $1,600 to $2,000.