Trump imposes 10% baseline tariff on all imports, raising economic uncertainty

Notably, Russian goods will not be subject to the new tariffs due to the minimal trade volume between the two countries. However, the U.S. is preparing to impose additional tariffs on American buyers of Russian raw materials.

Additionally, a 25% tariff on all imported automobiles came into force on April 3, as previously announced.

Former U.S. Treasury Secretary Lawrence Summers compared Trump’s tariffs to the oil shock of the 1970s. He warned that, just as in that period, the new tariffs could lead to a decline in production capacity, rising inflation, increased unemployment, and reduced investment. Summers, now a professor at Harvard University, told Bloomberg that these were "very serious economic measures" with consequences for both international relations and national security.

Prior to Trump’s announcement, U.S. stock market indices had closed with slight gains. However, after the full scale of the trade war became clear, S&P 500 futures dropped by 2%, and Nasdaq 100 futures fell nearly 3%. Stocks of all major automakers—including Ford, General Motors, Stellantis, and Tesla—declined in after-hours trading. Shares of tech and consumer goods companies also fell: Nike dropped by 6%, Apple by 5%, and Amazon by 4%.

Within the first 20 minutes of trading, the U.S. stock market lost $2 trillion in value.

Trump’s economic adviser Peter Navarro, who previously advocated for import tariffs during Trump’s first term, stated on Sunday that the new tariffs are expected to generate $700 billion annually for the U.S. budget — $100 billion from automobiles and $600 billion from other goods.

This is a massive figure, according to Bloomberg columnist Justin Fox, a former editor of Harvard Business Review and author of The Myth of the Rational Market. It is nearly nine times higher than current U.S. customs revenue and amounts to 2.4% of the country’s GDP. Since the early 1870s, U.S. customs revenues have never exceeded 2% of GDP — and even then, it was a short-term spike. Since the 1820s–1830s, such levels have not been seen consistently.

Trump frequently references the high tariffs implemented by President William McKinley (1897–1901), but during McKinley’s tenure, tariffs accounted for only 1% of GDP.

Currently, imports make up a much larger share of the economy than they did in the 19th and early 20th centuries. However, Trump aims to reduce this share — if successful, it would limit the potential revenue from tariffs, Fox argues. Moreover, while high tariffs were standard in the 19th century, that is no longer the case in the 20th and 21st centuries.

"Suddenly raising tariffs to 19th-century levels will cause a massive economic shock, with unpredictable consequences," Fox warns.

Mary Lovely, a senior fellow at the Peterson Institute for International Economics, stated that the new measures "turned out to be much worse than expected."

According to Evercore ISI calculations, the weighted average tariff will now be 29% — even higher than the 20% rate seen in 1930, when the U.S. sharply increased tariffs as part of protectionist policies. Economists note that such measures only worsened the situation back then and prolonged the country’s recovery from the Great Depression.

The new tariffs will fuel inflation in the U.S., while retaliatory measures from other nations will deal an additional blow to the economy, believes Luca Paolini, chief strategist at Pictet Asset Management.

"Following this so-called ‘Day of Freedom,’ there will come a ‘Day of Retaliation.’ If countries do not respond, they will appear weak. Broad tariffs increase the likelihood of a U.S. recession," he said.