Overview of the Announcement

On April 2, 2025, President Donald Trump revealed new “reciprocal tariffs” that will affect over 180 countries and territories as part of a comprehensive trade policy initiative. This bold move has significant implications for U.S. trade relations and economic health.

The announcement prompted a sharp decline in stock markets, as investors sought safer assets amidst growing uncertainty.

Economic Analysts Weigh In

Experts from various financial sectors have expressed grave concerns regarding the potential economic fallout from these tariffs:

• Tai Hui, J.P. Morgan Asset Management

  Hui noted that the announcement could increase U.S. average tariff rates to their highest levels in over a century. Such a spike could drive inflation, as manufacturing may struggle with capacity and pass increased costs down to consumers. He warned that consumers might reduce spending and businesses could postpone investments due to uncertainty over how these tariffs will affect the economy.

• David Rosenberg, Rosenberg Research

  Rosenberg emphasized that the repercussions of a global trade war are far-reaching. He criticized the notion that tariffs would shield consumers from added costs, stating that the burden of tariffs primarily falls on U.S. importers, which will subsequently be reflected in higher consumer prices. He predicts a significant price shock for American households as a result.

• Anthony Raza, UOB Asset Management

  Raza described the tariff figures as beyond comprehension, expressing disappointment that they are not being introduced gradually. He indicated that the immediate implementation could worsen negotiations with affected trading partners.

• David Roche, Quantum Strategy

  Roche contended that these tariffs are deeply rooted in President Trump’s policy philosophy, predicting prolonged economic isolationism. He also cautioned of potential backlash from the European Union and China, resulting in retaliation rather than negotiation, ultimately contributing to stagflation in the U.S. and EU.

• Shane Oliver, AMP

  According to Oliver, the new tariffs could elevate U.S. average tariff rates to levels previously seen in the 1930s, amplifying recession risks and diminishing global growth potential. He estimates a 40% likelihood of recession in the U.S. and forecasts a drop in global growth to approximately 2% unless significant policy responses are seen from countries like China.

• Tom Kenny, ANZ

  Kenny characterized the announced reciprocal tariffs as more severe than anticipated, predicting an effective tariff rate of 20-25%, the highest figure since the early 1900s. Following the announcement, market reactions suggested concerns over growth and inflation, influencing forecasts for earlier Federal Reserve rate cuts.