Written by Cláudio Afonso | LinkedIn | X
US stock futures slumped on Wednesday afternoon after President Donald Trump announced sweeping new tariffs of at least 10% on imports from more than 180 countries and territories.
The move drew swift criticism from major US trading partners, including China, Japan, Canada, Australia and the European Union, with several warning of retaliation.
The White House said a 10% baseline tariff would take effect on Saturday, April 5, applying broadly to all countries. A second wave of duties will be implemented on April 9, targeting countries and regions that the administration says impose higher tariffs on US goods, enforce non-tariff barriers or undermine American economic interests.
Among others, the regions and countries affected are the European Union (20% tariff), Vietnam (46%), Japan (24%), South Africa (30%), Cambodia (49%) and China (54%).
cTrump also confirmed that imported vehicles and foreign-made auto parts would face a 25% tariff. The measure, initally announced last week, is aimed at boosting domestic production while shielding US automakers from international competition — particularly China, the world’s largest car market.
In January 2024, Tesla CEO Elon Musk warned that Chinese automakers would “demolish” global competitors if trade barriers were removed. Musk said Chinese companies were the “most competitive” and “will have significant success outside of China, depending on what kind of tariffs or trade barriers are established.”
Tesla shares were down 3.7% at $272 in Thursday premarket trading, after earlier losses pushed the stock as low as $260 following Trump’s announcement.
China Tariffs
China will face an effective tariff rate of 54% under the new measures, including existing levies already in place.
Last year, tariffs on Chinese electric vehicles were quadrupled after President Joe Biden raised duties from 25% to 100% forcing EV makers to be able to sell in the U.S. only once they establish production plant and respective supply chain there.
Back then, Biden’s administration also imposed a 25% tariff on lithium-ion EV batteries and a 50% duty on photovoltaic solar cells, with a 50% tariff on semiconductors from China expected to take effect later this year.
In response to the latest escalation, China’s Ministry of Commerce on Thursday urged the US to “immediately cancel the unilateral tariff measures and properly resolve differences with its trading partners through equal dialogue.”
“This approach disregards the balance of interests achieved through years of multilateral trade negotiations and ignores the fact that the U.S. has long reaped substantial benefits from international trade,” the ministry said in a statement.
Mainland China’s CSI 300 Index slipped 0.59%, while Hong Kong’s Hang Seng Index dropped 1.52%.
US-listed shares of Chinese EV makers also declined in premarket trading. Nio Inc. was down 2.9%, XPeng Inc. fell 1.3%, and Zeekr Intelligent Technology Holding Ltd. dropped 0.3%.
No Price Hike
The tariff confirmation follows a Wall Street Journal report that Trump privately warned US automakers against raising prices in response to higher import duties. The report said company executives were left “rattled” and feared repercussions if they moved to pass costs on to consumers.
Trump denied the claim last Saturday, telling NBC News: “No, I never said that.” He added, “I couldn’t care less if they raise prices, because people are going to start buying American-made cars.”
GM currently produces about 52% of its US-sold vehicles domestically, with 30% sourced from Canada and Mexico and 18% from other regions. Ford manufactures roughly 77% of its US vehicles at home, with 21% built in Canada and Mexico and 2% elsewhere.
Trump said the tariffs would be permanent, adding, “The world has been ripping off the United States for the last 40 years and more. And all we’re doing is being fair, and frankly, I’m being very generous.”
