US President Donald Trump’s 10% ‘baseline’ tariffs kicked in on Saturday, triggering a global market selloff.
European equity markets including the DAX, the CAC 40, and the FTSE 100 fell on Monday, mirroring losses seen on Asian stock indexes.
US markets also plunged for a third straight session on Monday, with the Dow Jones, the S&P 500 and the Nasdaq all in the red.
Speaking aboard Air Force One late on Sunday, Trump doubled down on his tariffs, saying that several world leaders had already reached out over the weekend to negotiate better terms.
“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said, dismissing concerns over the global sell-off.
Trump defended the tariffs as the only solution to what he called “massive financial deficits” with China, the EU, and others.
“They are already in effect, and a beautiful thing to behold,” he wrote on Truth Social.
“Someday people will realize that tariffs, for the United States of America, are a very beautiful thing!” he added.
EU and global leaders have decried the tariffs as “a major economic blow” and warned of the effects it could have on goods prices, for average consumers in particular.
The modern global trading system was effectively created by the US. Institutions now considered pillars of international commerce — such as the World Trade Organization, the International Monetary Fund, and the World Bank were shaped by US international trade policies. Given the role of American administrations in building these structures, Trump’s decision to dismantle them has attracted fierce criticism.
We break down who is being targeted, how the tariffs were calculated, and what the broader consequences might be.
Who got hit — and how hard?
Euronews has calculated that a total of 190 countries and territories—not counting all EU members one by one—were hit with tariffs, ranging from economic powerhouses like China to far-flung Pacific island nations like Vanuatu.
A baseline tariff of 10% was applied to countries that do not have a significant trade deficit with the US. In other words, this applies to countries where the US does not buy significantly more from them than they do from the US.
Some of these countries, including Belgium, the UK, Brazil, Chile and the Netherlands, actually operate a trade surplus with the US—namely the US imports more from them than it exports to them.
Countries facing a 10% tariff outnumber nations that have higher rates, and these levies went into effect on 5 April. Trump’s “reciprocal tariff rates”, on the other hand, go in effect on 9 April.
The European Union as a whole received a 20% tariff on imports. EU members such as the Netherlands were not specifically named in the list produced by the White House, so it is safe to assume that the collective tariff on the European Union will affect the Netherlands.
It is however unclear whether tariff stacking will occur in what are considered to be the EU’s outermost regions—for example, islands such as Saint Martin and Sint Maarten, which belong to France and The Netherlands respectively and are part of the EU’s free trade agreements. This could mean that they will receive the 20% EU bloc ‘reciprocal’ tariff and the 10% baseline tariff, amounting to 30% in total.
While the White House has specified that “President Trump will impose an individualized reciprocal higher tariff on the countries with which the United States has the largest trade deficits… all other countries will continue to be subject to the original 10% tariff baseline,” the Saint Martin and Sint Maarten example shows that some territories fall into both groups.
The reciprocal rates will become effective at 12:01am EDT (6.01 am CEST) on 9 April.
How were these tariffs calculated?
For everyone who saw the unveiling of the tariffs in the Rose Garden on Wednesday — when Trump held up the boards displaying the countries’ names — there were two columns. The second column listed the tariffs that the US was placing on the imports from other countries, which we’ve categorised above.
It was the first column, however, that puzzled economists. It claimed to show the tariffs imposed on the US, plus factors like “currency manipulation and trade barriers,” with figures such as 67% for China and 39% for the EU.
But these numbers do not accurately reflect the actual tariffs these countries apply to US imports. For example, the World Trade Organization estimates that the EU’s average tariff on US goods is 4.8%, though it can be higher in specific sectors. Automobiles, for instance, are subject to a 10% tariff.
Although the White House later released what it claimed was the formula used to calculate the alleged trade imbalance shown in the first column, business and economic analysts quickly noticed that Trump was relying on a cruder metric. Washington was dividing the trade deficit — the amount by which US imports exceed exports — by the total value of imported goods. This is how the large numbers for China and the EU were produced.
From there, the so-called reciprocal tariff was calculated as roughly half of the alleged tariff gap, an approach that’s largely without precedent in the history of trade and tariffs.
Are trade deficits really that bad?
In its simplest reading, a trade deficit means a country imports more than it exports. This can sound bad, but one of the reasons the US has a trade deficit with certain countries is because of its immense purchasing power—it has one of the world’s strongest economies, and its consumers want to be able to purchase a diverse array of goods from around the world.
In fact, some of these countries that have trade surpluses with the US export goods that are not even sold in their local markets. Think nations that produce textiles or foods made specifically for the US market. A lot of those countries are significantly poorer than the US and these exports are a lifeline for their economies, while they also provide the US with cheaper alternatives for in-demand goods.
Trump’s reading is that Americans are sending money overseas or supporting foreign economies when they could be spending it at home. But that doesn’t necessarily mean viable alternatives exist within the US market—or they may be substantially more expensive—meaning Trump’s plans may backfire.
