President Donald Trump announced sweeping tariffs on most nations Wednesday, which his administration says will free the United States from relying on other countries for trade.
The president has framed these tariffs as “reciprocal” to match trade barriers that other countries impose on products from the U.S., dollar for dollar, but in reality, they are based on trade deficits instead. Stock markets around the globe and in the U.S. fell significantly the day after the tariffs were announced.
Here is what to know about these sweeping tariffs:
Who is hit by tariffs?
The vast majority of countries are facing new tariffs.
Trump imposed baseline 10% tariffs on all trading partners, with some countries facing steeper tariffs depending on their trade surpluses with the U.S.
These tariffs do not apply to Mexico or Canada, the two largest U.S. trading partners, because Trump has already applied tariffs to them as part of negotiations over the flow of illegal immigration and drugs.
These tariffs also do not apply to Russia, North Korea, Cuba, or Belarus. A White House official told the Washington Examiner that North Korea and Russia already face extremely high tariffs and sanctions by the U.S.
The order signed by Trump also ends “de minimis” exemptions for imports. These exemptions allow shipments worth less than $800 to enter the U.S. duty-free. They will be ended once the secretary of commerce certifies that the systems are in place to collect duties on small shipments.
How are the tariffs calculated?
Trump has framed the tariffs as “reciprocal,” which means that the same tariff rate is placed on other countries as those countries place on imports from the U.S. He has also said the tariff rate would take into account not just other countries’ tariffs but also any nontrade barriers they put in place.
In reality, though, the tariff rates were calculated based on trade partners’ trade surplus with the U.S. as a share of their exports to the U.S., according to documentation published by the U.S. Trade Representative.
For example, the Trump administration placed a 26% tariff on South Korea, but the U.S. has a free-trade agreement with South Korea that has effectively eliminated most tariffs. The tariff on that country is based on its trade surplus with the U.S., not trade barriers.
The tariff rates range from 0 to 99%. The average tariff is 20% and is 41% when weighted by trade volume.
The European Union was hit with a 20% tariff, India with 26%, and Japan with 24%, among many others.
Some Southeast Asian countries are now facing high tariffs. Vietnam faces duties of 46%, and Cambodia 49%.
Treasury Secretary Scott Bessent had previously said the Trump administration would consider four factors in how they would tariff each country.
“We are going to go to them and say, ‘Look, here is where we think the tariff levels are, nontariff barriers, currency manipulation, unfair funding, labor suppression, and if you will stop this, we will not put up the tariff wall,’” he said.
What industries are exempted?
There are some exemptions from the tariffs, including the imports that Trump has already subjected to tariffs, such as steel, aluminum, and automobiles and auto parts. The “reciprocal tariffs” also exclude goods that Trump has said will later face tariffs, including copper, pharmaceuticals, semiconductors, and lumber.
Imports of energy products such as oil and gas are also exempt, as are certain critical minerals that are not available in the U.S. Canada and Mexico make up the largest sources of crude oil exports to the U.S., with Canada alone accounting for 60%.
What about China?
Earlier this year, Trump imposed 20% tariffs on China. His Wednesday announcement also adds 34% “reciprocal” tariffs to the existing 20%.
Trump has also issued a separate order ending “de minimis” exemptions for China. The designation has been critical for low-cost retailers such as Temu and Shein.
The administration has said its original tariffs on China were necessary to stop the flow of illicit fentanyl from the country to the U.S.
China has vowed to hit the U.S. with more tariffs, further escalating the trade war.
“China firmly opposes this and will resolutely take countermeasures to safeguard its own rights and interests,” China’s Ministry of Commerce said in a statement Thursday.
When are they going into effect?
The 10% baseline tariff takes effect on Saturday, April 5, at 12:01 a.m. The larger tariffs take effect on April 9 at 12:01 a.m.
China’s “de minimis” exemption will close on May 2. The other “de minimis” exemptions will be closed when the secretary of commerce determines it is possible to do so.
Bessent has said countries should not act immediately against the tariffs and should not issue retaliatory tariffs against the U.S. following Trump’s tariff announcement.
“Everybody sit back, take a deep breath, don’t immediately retaliate. Let’s see where this goes. Because if you retaliate, that’s how we get escalation,” he said on CNN.
By what authority did Trump impose the tariffs?
Trump issued the tariffs through authorities granted by the International Emergency Economic Powers Act of 1977, a law giving the president wide powers to regulate financial transactions and international commerce based on a finding of a national security emergency. Historically, this law has been used to impose sanctions on adversaries such as Iran and Russia.
GOP ANXIETIES PEAK AS TRUMP’S ‘LIBERATION DAY’ TARIFFS ARRIVE
Congress could vote to cancel the emergency declaration and end the tariffs with a simple majority. Four Republican senators supported a privileged measure from Sen. Tim Kaine (D-VA) to revoke Trump’s declared fentanyl emergency used to impose a 25% tariff on Canada. The measure passed as it required only a simple majority. It is not likely to be voted on in the House.
Trump, however, could override Congress’s actions with a veto. To override a presidential veto, a two-thirds supermajority in both the House and Senate would be needed.