Trump’s sweeping new tariffs take effect

US President Donald Trump’s sweeping new tariffs have gone into full effect.

When Mr Trump announced the latest round of tariffs on April 2, he declared that the US would now tax nearly all of America’s trading partners at a minimum of 10% – and impose steeper rates for countries that he says run trade surpluses with the US.

The 10% baseline had already gone into effect on Saturday. Mr Trump’s higher import tax rates on dozens of countries and territories took hold at midnight, Washington DC time (5am BST).

The steeper levies run as high as 50% – with that biggest rate landing on small economies that trade little with the US, including the African kingdom of Lesotho.

Some other rates include a tax of 47% on imports from Madagascar, 46% on Vietnam, 32% on Taiwan, 25% on South Korea, 24% on Japan and 20% on the European Union.

Some of these new tariffs build on previous trade measures.

Threats

Mr Trump last week announced a tariff of 34% on China, for example, which would come on top of 20% levies he imposed on the country earlier this year.

Mr Trump has since threatened to add an another 50% levy on Chinese goods in response to Beijing’s recently promised retaliation. That would bring the combined total to 104% against China.

South Korea has launched an emergency funding programme worth three trillion won (£1.56 billion) to help its automobile industry cope with the impact of increased US tariffs.

The government package includes expanded low-cost financing from state-run lenders, as well as a new financing programme backed by car giants Hyundai and Kia, along with financial institutions, aimed at supporting struggling carmakers and parts manufacturers. The government will also expand subsidies for electric vehicle purchases.

Garment manufacturers and exporters in Bangladesh, the world’s second largest after China, are worried about losing its share in the apparel market of the United States, which is imposing new tariffs of 37%.

The US is Bangladesh’s largest market as a single destination where the country’s nearly 39 billion dollar (£30.5 billion) industry exported apparel goods worth 7.34 billion dollars (£5.7 billion) in 2024.

Now, Bangladesh’s manufacturers say their US buyers are halting orders, which could help competitors like India and Pakistan overtake Bangladesh in the US market.

Losses

The Nikkei 225 lost 3.9% to 31,714.03. In Hong Kong, the Hang Seng lost 0.4% to 20,041.03, while the Shanghai Composite index reversed early losses, gaining 0.9% to 3,173.56. Taiwan led losses in Asia, as its Taiex plunged 5.8%.

South Korea’s Kospi lost 1.7% to 2,293.70, and the government said it would provide help for its beleaguered carmakers.

The S&P/ASX 200 in Australia declined 1.8% to 7,375.00. Shares in New Zealand also fell.

In India, the Sensex declined 0.5% as the central bank cut its benchmark interest rate, while Bangkok’s SET shed 0.8%.