Trump declares a national emergency, imposes comprehensive tariffs, sets a 10% "minimum baseline tariff," and imposes higher taxes on countries with the largest trade deficits with the U.S

Source: Wall Street News

On April 2, Wednesday, Eastern Time, after the US stock market closed, according to Xinhua News Agency, US President Trump signed two executive orders regarding the so-called "reciprocal tariffs" at the White House, announcing a 10% "minimum baseline tariff" on trade partners and imposing higher tariffs on certain trade partners.

According to CCTV News, Trump stated that the US would calculate all tariffs, non-tariff barriers, and other forms of comprehensive tax rates from countries that pose a significant threat to the US. The tariffs will not be completely reciprocal, and the US will charge about half of the fees to these countries.

According to CCTV, the White House issued a statement saying that Trump declared a national emergency on Wednesday to enhance the US's competitive advantage, protect US sovereignty, and strengthen national and economic security.

CCTV cited the aforementioned White House statement, indicating that Trump would impose a 10% "baseline tariff" on all countries, which will take effect at 12:01 AM Eastern Time on April 5. Additionally, Trump will impose personalized higher "reciprocal tariffs" on countries with the largest trade deficits with the US, which will take effect at 12:01 AM Eastern Time on April 9, while all other countries will continue to adhere to the original 10% tariff baseline.

According to charts released by the White House, the US will impose a 10% tariff on imports from the UK, Australia, Brazil, Saudi Arabia, the UAE, and Kuwait, a 17% tariff on Israeli goods, a 20% tariff on EU goods, a 24% tariff on Japanese goods, a 25% tariff on South Korean goods, a 26% tariff on Indian goods, a 36% tariff on Thai goods, a 39% tariff on Iraqi goods, a 46% tariff on Vietnamese goods, and a 49% tariff on Cambodian goods, the highest rate.

CCTV mentioned that the aforementioned White House statement indicated that some goods would not be subject to the "reciprocal tariffs," including steel and aluminum products already subject to Section 232 tariffs, automobiles and auto parts, goods that may be subject to future Section 232 tariffs, and certain energy and mineral products not available in the US. Additionally, gold bars, copper, pharmaceuticals, semiconductors, and wood products are also exempt from the "reciprocal tariffs."

The statement also indicated that for Canada and Mexico, goods that comply with the United States-Mexico-Canada Agreement (USMCA) will continue to receive tariff exemptions.

The Trump administration stated that Canada and Mexico would be temporarily exempt from the 10% baseline tariff and the reciprocal tariffs targeting specific countries.

According to CCTV, Trump also announced on Wednesday a 25% tariff on imported automobiles. Trump stated that the 25% tariff on automobiles would take effect on April 3.

After Trump's announcement of the baseline tariff rates and specific tariffs faced by various countries, US stock futures fell. After the US stock market closed, Nasdaq 100 futures dropped over 3%, S&P 500 futures fell nearly 2%, and Dow futures declined about 1%. In the Asia-Pacific market, stock index futures further widened their declines, with Nasdaq 100 futures dropping over 4%, S&P 500 futures falling over 3%, and Dow futures decreasing over 2%.

The foreign exchange market reacted strongly. The euro initially saw its gains rapidly expand before retreating. The euro against the US dollar, which was around 1.0860, briefly broke above 1.0920, rising about 1% during the day, but later retraced more than half of its gains.

The spot price of Bitcoin (BTC) surged to $88,000, reaching a high not seen since March 25, rising over $4,000, or more than 5%, from the day's low before retracing most of its gains, falling back below $86,000, and briefly dipping below $85,300, a drop of over $3,000 from earlier highs.

Spot gold experienced a short-term "flash crash," plummeting from around $3,125 to near $3,105, turning to a decline of over 0.1% during the day, but quickly rebounded, briefly breaking above $3,140, refreshing the day's high, and rising nearly 1% during the day.

COMEX June gold futures also initially "flash crashed" before rebounding, briefly rising above $3,200 after the US stock market closed, refreshing the intraday high set during Thursday's US stock market session, and rising nearly 1.8% from Tuesday's close.

US Treasury prices experienced a V-shaped reversal, with yields initially rising and then falling. The yield on the US 10-year benchmark Treasury rose above 4.23%, refreshing the day's high, but quickly fell below 4.20%, briefly approaching 4.11%, nearing the intraday low set since March 4 after the release of the "little non-farm" ADP employment report before the US stock market opened.