In 5 charts: A month of reciprocal tariff chaos
Summary
On 2 April, Donald Trump unleashed his reciprocal tariffs, raising uncertainty in the world. Mint explores how policies of the world's largest economy impacted the world in the past 30 days.
A dose of “tough love"—that’s how US President Donald Trump described the wave of “reciprocal" tariffs he announced on 2 April against several of America’s trading partners. Since then, he has walked back several of these measures, even as he plunged headlong into a full-blown trade war with China. Yet, the tariff regime is expected to disrupt global trade flows, and more immediately stoke inflation and dampen growth in the US.
Trump, who has long argued that the world is taking advantage of the US, had already imposed multiple tariffs during his first term. He began his second term by targeting key neighbours—Canada and Mexico—and on 2 April, dramatically expanded those tariffs to include nearly every trading partner. Earlier rounds had already hit steel and aluminium imports.
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Facing sharp sell-offs in equity and bond markets, Trump softened his stance on several fronts. He paused most of the newly announced tariffs for 90 days—excluding China—reduced the baseline tariff to 10%, and exempted consumer tech products, even from China.
Still, the policy whiplash and resulting uncertainty have rattled the US economy. The contraction in US GDP during the January-March quarter has only intensified concerns that a recession may be on the horizon.
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Status check
Let’s start with a quick timeline of how the saga unfolded.
It began in January, with tariffs targeting three of the America’s largest trading partners—China, Canada, and Mexico. By April, the measures had widened to include nearly all trading partners, alongside additional levies on steel and aluminium. As things stand, there’s a 90-day pause on the reciprocal tariffs for all countries except China.
Stock shock
Global stock markets responded sharply to the tariff announcements, with major indices in the US, Japan, and Europe posting some of their steepest single-day losses. While markets have since rebounded somewhat, they remain below pre-tariff levels—reflecting lingering investor anxiety and ongoing uncertainty.
Read this | Beyond the tariff truce: Where can investors find lasting protection?
Loss of confidence
Since Trump’s return to office, the dollar index has fallen nearly 9%, while gold, a safe-haven asset, has risen to record highs. Meanwhile, the impact of Trump’s tariffs on international currencies is more of a mixed picture.
Economic cues
Is there a tangible impact of tariffs visible on the ground? Initial economic cues indicate that the tariffs have begun to bite the biggest economy. The US has seen its GDP contract in the first quarter due to weaker consumer spending and tariffs leading to a surge in imports. This is the first negative reading since 2022.
Popularity down?
While Trump's policies have put the world on edge, they have also not gone down well with the US citizens, with several polls pointing to declining popularity of the American president.
A poll conducted by broadcaster CNN, weeks after the announcement, showed that over half of Americans view imposing tariffs and specifically the high tariffs on China, as ‘bad policy’. Also, 59% felt Donald Trump’s policies have worsened economic conditions in the country.
As the world recalibrates to the new trade order ushered in by Trump’s actions, fears of a global slowdown and shifting supply chains continue to fuel uncertainty.
