Trump's tariffs a 'major blow to world economy', EU warns, as markets fall in Asia

By Neville Lazarus, India reporter, in New Delhi

President Trump slapped a 26% tariff on India, calling it a discounted rate against an average 52% duty on American products. The new tariffs are lower than many Asian countries are facing from the US, for example, Vietnam (46%), Thailand (36%), Taiwan and Indonesia (32%). 

The Indian commerce ministry has said the new policy is a mixed bag and not a setback for the country. It is still analysing the impact it will have on domestic exporters.

Trump has often labeled India as "tariff king" and a big abuser of trade ties. He shared a report from the US Trade Department found Indian tariffs on agricultural products are among the highest in the world - averaging 113 %.

America is India's largest trading partner with bilateral trade of about $130bn in 2024. But there is a trade deficit of $46bn in favour of India.

The new policy will mainly impact agricultural products, automobile parts, textiles, gems and jewellery.

An exemption for pharma firms

A key sector left untouched is pharmaceuticals. India is one of the largest exporters to the US and supplies nearly 47% of all generic pharmaceuticals to American patients. Tariffs on these will drive up costs - which will most likely be passed on to US consumers.

Indian pharma companies will refrain from setting up manufacturing in the US as they will still make a profit with higher tariffs, and it could take six to eight years to construct expensive facilities and get regulatory approvals.

India's efforts to woo Trump - and ongoing US concerns

The Indian government has taken steps to win over Trump by lowering tariffs on motorcycles, bourbon and digital services for US tech giants - but the president wants more.

The US has raised concerns over adequate enforcement of intellectual property rights, restrictions on foreign direct investment in the retail industry, an unlevel playing field in the insurance sector, as well as the wide range of agricultural subsidies.

What next?

A bilateral trade agreement is being negotiated between the two countries, which could provide India relief in the future.

The effects of the new policy have been felt in this morning's trading with a drop in the Indian stock market and Sensex when it opened.

Liberation day is here, but will Trump's tariffs save America? On Day 74, US correspondents Mark Stone and James Matthews discuss what the new tariffs mean for the US and the world.

And, with Elon Musk's funding of the Wisconsin Supreme Court race falling short, is the shine the billionaire brings to Trump's administration starting to rub off?

If you've got a question you'd like Mark, Martha, and James to answer, you can email it to [email protected].  

French President Emmanuel Macron is set to convene all representatives of business sectors hit by the US import tariffs at Elysee Palace in Paris later today.

As we've been reporting, Donald Trump unveiled a 10% minimum tariff on most goods imported to the US - with a higher 20% rate for the European Union.

The French wine and spirits industry had already been under pressure, with exports globally falling for the second consecutive year in 2024 due to threats of US tariffs, a softer Chinese market and lower prices.

The FEVS, the company in charge of French wine exports, has described the 20% tariff on EU beverages as colossal.

"It will have a very significant impact on business in the United States - a very significant impact on the American
consumer," FEVS chairman Gabriel Picard said.

The US is the largest market for French wine and spirits, with shipments to the US rising 5% in 2024 to $4.12bn.

By Helen-Ann Smith, Asia correspondent in Beijing

China was expecting further tariffs and it will have been preparing, but no degree of preparation could effectively counter the immediate impact this latest round of tariffs will have on China's economy.

Once you add together tariffs levied earlier this year to those still in place from Trump's first term, all Chinese goods will now face import taxes of over 50%, some potentially as high as 70%.

Such levels realistically render trade with America all but impossible for the vast majority of businesses.

Given exports account for 20% of China's entire economy and trade with America makes up about 15%, the impact will be huge and wide reaching.

Experts are already predicting job losses could be in the millions, swathes of small businesses that populate China's complex supply chains could go under, and there is a high chance China's growth target of around 5% will be missed.

For a country already grappling with a slowing economy and high unemployment, it all amounts to a serious challenge.

Wider Asian tariffs a roadblock on usual Chinese workarounds

There's a sense people have been particularly caught off guard by the targeting of other smaller Southeast Asian economies. 

Reciprocal tariffs of 46% on Vietnam , 49% on Cambodia and 36% on Thailand are not only catastrophic for those lower-income economies, but they also put a hard roadblock on an increasing trend of Chinese companies relocating to avoid tariffs - even workarounds are now not an option.

The impact on Asia as a broader region was reflected in the markets, which were lower on opening, and a significant slide in the futures trading. Leading regional economies Japan, South Korea and Indonesia have also taken big hits.

There will almost certainly be frenetic negotiations under way behind the scenes, but China will absolutely need to be seen to respond. 

The ministry for commerce has already said as much in a statement.

The question is when and how far it will go. 

Authorities here can ill afford further escalation, but will not want to be seen to be bullied. 

The Asian markets have tumbled after Donald Trump announced a wave of tariffs on imports across the globe.

Stocks and currencies in Vietnam and Thailand tanked this morning, as the two Asian countries face among the highest reciprocal rates under the president's sweeping new levies that threaten to escalate a global trade war.

Vietnam's benchmark stock index fell as much as 5.4% to a more than two-month low, and the dong touched an all-time low of 25,802 per dollar.

Thailand's baht weakened to its lowest level since mid-January and its equities slipped as much as 1.3%.

Earlier today, Vietnamese Prime Minister Pham Minh Chinh held an urgent cabinet meeting, state media reported, while Thai Prime Minister Paetongtarn Shinawatra said the country will negotiate with the US.

And in Japan Nikkei 225 opened over 4% lower today - at 9.26am (local time), the benchmark was down 3.31%.

Besides Chinese imports, which will be hit with a 34% tariff on top of the 20% Trump previously imposed, Vietnam faces 46% levies, Thailand 36%, South Korea 25%, and India faces 26%.

Trump's new levies have rattled markets as fears grow that a full-blown trade war could trigger a sharp global economic slowdown.

China's yuan touched a seven-week low, and stocks tumbled 0.4%.

South Korea's won dropped 0.4%, and shares fell as much as 2.7% to a three-month low. 

The Indian rupee weakened 0.3%, while Malaysia's ringgit fell as much as 0.6% to a two-month low.

European Commission president Ursula von der Leyen has been giving her first reaction after Donald Trump's announcement of a 20% tariff on all goods from European Union countries.

She said they would have "dire consequences" for millions of people around the world - and that there seemed to be "no order in the disorder" of the actions of the US.

"Donald Trump's announcement of universal tariffs on the whole world, including the EU, is a major blow to the world economy," she said.

"I deeply regret this choice.

"The global economy will massively suffer and uncertainty will "spiral.

"The consequences will be dire for millions around the word."

The EU last month announced €26bn of countermeasures against a range of US goods - scheduled to take effect this month - in response to separate 25% tariffs on European steel and aluminium.

"We are already finalising the first package of countermeasures in response to tariffs on steel," said Von der Leyen on Thursday morning.

"We're now preparing for further countermeasures to protect our interests and our businesses if negotiations fail." 

She added: "We will stand together, our unity is our strength."

China, facing a 34% tax, says it will "resolutely" hit back at the US and "take countermeasures to safeguard its own rights and interests".

"China urges the United States to immediately cancel its unilateral tariff measures and properly resolve differences with its trading partners through equal dialogue," said the commerce ministry.

Trump previously imposed a 20% tariff on China earlier this year, so combined with the new levy, there's a 54% tariff on US imports of Chinese goods.

It comes as China's yuan slumped to a seven-week low against the US dollar after Donald Trump unveiled sweeping reciprocal tariffs that were particularly heavy on China and its trading partners.

The onshore yuan fell to 7.3060 per dollar, its weakest since 13 February, while the offshore yuan dropped to 7.3485 per dollar in the late New York session, the lowest level since 3 February.

Today, the UK and much of the world wakes up to a changed landscape for global trade.

Last night, Donald Trump finally revealed his long-awaited package of tariffs, with virtually all countries affected, it seems.

He did so by lifting a chart listing countries and their impending levies while on stage in the White House's Rose Garden.

The key figure for the UK is 10% - a tariff rate far lower than other countries, with the EU facing 20%.

That 10% figure is the baseline for all countries, with a special set of rates for 60 countries deemed by Trump to be the "worst offenders".

These levies will both come into effect within a week.

Until then, attention turns to the likes of the EU, China and the reaction in Westminster as nations around the world weigh up how to respond - if at all.

As our economics and data editor Ed Conway explained, there will be consequences either way - and this saga is far from over.

Stay with us here as we keep track of developments.

But we'll be back in the morning with all the latest news.

Before we check out, here's a brief rundown of what happened on Donald Trump's "Liberation Day" for the US...

• In a speech in the Rose Garden, Trump announced new universal 10% tariffs on all imports into the US, starting from 5 April;
• Certain countries will be hit harder, with Trump holding up a visual aid during his speech revealing some levies as high as 54%;
• Trump says the UK will have 10% tariffs on its goods, and the EU's rate will be set at 20%;
• A 25% tariff on all foreign-made vehicles will also begin from midnight tonight (4am UK time); 
• The US president said the new tariffs will signal a "golden age" for the US economy.

Watch: What you need to know about Trump's tariffs

Donald Trump brandished a chart during his Rose Garden speech highlighting his sweeping new tariffs.

For those of you not eagle-eyed enough to spot every single country on that list and which tariffs now apply to them, here's a rundown...