Trump's tariffs prove harsher than expected
As flagged in advance, President Trump on 2 April announced the details of his new tariff policy. In addition to a standard base tariff of 10% on most imports, he introduced "reciprocal tariffs" that will impose higher rates on countries running trade surpluses with the US, with the rates calibrated to the scale of the imbalance. The base tariff will take effect on 5 April, and the reciprocal tariffs will come into effect on 9 April. Japan will be subject to a 24% tariff. According to some media reports, the reciprocal tariff rates were not based on established benchmarks such as the WTO's 2023 trade-weighted average tariffs, but rather calculated in terms of what level of tariffs would be required to eliminate the US trade deficit. As a result, the announced rates are higher across the board than markets had expected, including for Japan.
