On his country’s Liberation Day, US President Donald John Trump delivered the greatest shock to the Global Economy in recent times by unveiling the Policy of Reciprocal Tariffs.

On April 2, 2025, the US President did not spare his friends, as well as foes, as he imposed higher tariffs on their products. He announced sweeping tariffs on imports from all countries, including a 10% baseline duty and higher rates for those countries, with Cambodia (49%), Vietnam (46%) and Sri Lanka (44%) facing the highest levies. The policy also includes a 25% tariff on automobile imports. Other Asian economies, like Bangladesh (37%), Thailand (36%), Taiwan (32%), Indonesia (32%) and India (26%), face steep levies, too.

China, the main target of Trump’s trade policy, would be subjected to a 34% tariff, while the European Union (EU) would have to pay a 20% duty on its exports to the US. While several countries have criticised this policy, China has hit back at the US tariff policy with a 34% tax on American products, apart from curbing exports to the US. The Asian Powerhouse not only added 16 US entities to its Export Control List, but also included another 11 US firms in the Unreliable Entities List. The move would allow Beijing to take punitive action against foreign entities, like Skydio Inc and BRINC Drones, over arms sales to democratically-governed Taiwan, which the Asian Giant claims as part of its territory. If other countries follow China’s step to retaliate against Trump’s tariff policy, then the global economy would be in dire straits.

Interestingly, Australian Prime Minister Anthony Norman Albanese has hinted that his government would not impose reciprocal tariffs on US products. Instead, he would urge President Trump to lower tariffs.

Economists are of the opinion that the imposition of tariffs would certainly lead to a significant macroeconomic shock. JP Morgan, the major Wall Street institution, has mentioned in a statement that President Trump’s tariff policy “could push the US and global economy into recession this year”. Michael Feroli, the Chief US Economist of JP Morgan, has stressed that the US’ GDP is expected to contract “under the weight of the tariffs”. He also said that the recession might “push the unemployment rate up to 5.3%“. Feroli told Bloomberg: “We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3%, down from 1.3% previously.”

However, the US President has hinted that he would decrease the duties imposed by his administration if other countries agree to address the US’ concerns. It may be noted that India recently agreed to the terms of reference for the agreement while holding trade talks with the US. The Narendra Modi Administration in New Delhi has also decided to lower tariffs on high-end cars, as well as high-capacity motorcycles, to do away with the equalisation levy. However, many countries are not ready to take such an accommodative stance.

Rebeca Grynspan, the Secretary General of the UN Conference on Trade and Development (UNCTAD), has strongly criticised President Trump for triggering a trade war, stressing that his Tariff Policy is against global economic development. She has claimed that the vulnerable and the poor would be at risk because of the US policy which would have a negative impact on the global economy as a whole.

In such a scenario, Grynspan has issued a statement, mentioning: “Trade must not become another source of instability. It should serve development and global growth.” She stated: “Global trade rules must evolve to reflect today’s challenges, but they must do so with predictability and development at their core, protecting the most vulnerable.” Grynspan added: “This is a time for cooperation, not escalation.“

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Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das