New tariffs take effect at midnight

The US government began enforcing President Donald Trump’s sweeping new tariff plan on Wednesday, targeting around 90 countries with new duties—including a massive 104% levy on imports from China.

The broad set of reciprocal tariffs, which affect both allies and adversaries, took effect just after midnight. They are in addition to a 10% baseline levy that was implemented on April 5.

Trump, 78, imposed the highest tariffs on China after Beijing responded to a previous 34% US tariff by introducing a matching 34% retaliatory duty on American goods.

China slapped with highest rate

“It was a mistake for China to retaliate,” said White House press secretary Karoline Leavitt on Tuesday. “The president, when America is punched, he punches back harder. That’s why there will be 104% tariffs going into effect on China tonight at midnight.”

The total 104% tariff rate includes a 50% retaliatory tariff, a 34% reciprocal levy, and a previously imposed 20% duty on Chinese imports.

A push for economic independence

Trump considers his tariff initiative to be the country’s “Declaration of Economic Independence.” He believes the strategy will tear down international trade barriers and ignite domestic manufacturing.

The tariffs include levies of 17%, 20%, 24%, and 25% on imports from Israel, the European Union, Japan, and South Korea, respectively. These rates were calculated by the Council of Economic Advisers based on trade imbalances with the US, plus the baseline rate.

Tailored trade deals on the table

According to administration officials, Trump’s announcement—dubbed “Liberation Day”—has triggered a wave of calls from foreign leaders seeking relief from the new tariffs.

“The president met with his trade team this morning, and he directed them to have tailor-made trade deals with each and every country that calls up this administration to strike a deal,” said Leavitt. However, she also emphasized that Trump “expects that these tariffs are going to go into effect.”

At a White House event Tuesday, Trump announced that the US was already generating nearly $2 billion a day in tariff revenue.

Wall Street reels from tariff fallout

Despite Trump’s optimism, the economic impact of the tariffs has shaken Wall Street. The S&P 500 index fell 10.5% in the two days after last week’s announcement—the biggest two-day loss since March 2020. It dropped again Tuesday by more than 1.5%.

The Dow Jones Industrial Average fell 320 points on the eve of the new tariffs and is now more than 10% below its all-time high recorded in December.

Meanwhile, the Nasdaq Composite fell over 2% on Tuesday and officially entered bear market territory, defined as a drop of 20% or more from its peak, according to Reuters.

Tariffs to stay unless resolved

If the US does not reach deals with affected countries, Trump plans to keep the tariffs in place until he determines that “the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated,” according to the executive order.