Evelyn Reynolds

President Donald Trump’s new policies put the effective tariff rate above the level of around 20% set by 1930’s Smoot-Hawley Tariff Act, according to Sarah Bianchi, a strategist at Evercore ISI.
An estimate from Fitch Ratings said that the tariff rate would hit its highest level since 1909.
The full economic impact of the new duties will likely depend on how long they are in place and whether other nations retaliate.

U.S. President Donald Trump holds a chart next to U.S. Secretary of Commerce Howard Lutnick as Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025.
Carlos Barria | Reuters

The tariff policy outlined by President Donald Trump on Wednesday appears set to raise the level of U.S. import duties to the highest in more than 100 years.
The U.S. introduced a baseline 10% tariff on imports, but also steep country-by-country rates on some major trading partners, including China. The country-by-country rates appear to be related to the trade deficit the U.S. has with each trading partner.

Sarah Bianchi, Evercore ISI chief strategist of international political affairs and public policy, said in a note to clients late Wednesday that the new policies put the effective tariff rate above the level of around 20% set by 1930’s Smoot-Hawley Tariff Act, which is often cited by economists as a contributing factor to the Great Depression.

Arrows pointing outwards

Evercore ISI

“A very tough and more bearish announcement that pushes the overall U.S. weighted average tariff rate to 24%, the highest in over 100 years – and likely headed to as high as 27% once anticipated 232s are complete,” Bianchi wrote. The “232s” is a reference to some sector-specific tariffs that could be added soon.
JPMorgan’s chief U.S. economist Michael Feroli came up with similar results when his team crunched the numbers.
“By our calculations this takes the average effective tariff rate from what had been prior to today’s announcement around 10% to just over 23%. … A White House official mentioned that other section 232 tariffs (e.g. chips, pharma, critical minerals) are still in the works, so the average effective rate could go even higher. Moreover, the executive order states that retaliation by US trading partners could result in even higher US tariffs,” Feroli said in a note to clients.

An estimate from Fitch Ratings was in the same range, with a report saying the tariff rate would hit its highest level since 1909.

Trump referenced the Smoot-Hawley Act in his Rose Garden remarks on Wednesday. The president said the issue was not the tariffs imposed in 1930 but the previous decision to remove the higher tariffs that existed earlier in the 20th century.
“It would have never happened if they had stayed with the tariff policy. It would have been a much different story. They tried to bring back tariffs to save our country, but it was gone. It was gone. It was too late,” Trump said.
The full economic impact of the new tariffs will likely depend on how long they are in place and if other countries retaliate. Trump and Treasury Secretary Scott Bessent have indicated that the country-by-country tariffs could come down if those trade partners change their policies.
JPMorgan global economist Nora Szentivanyi warned that Trump’s tariffs were likely to push the U.S. and global economy into a recession this year if they are sustained. More

President Trump’s tariffs have spared almost no corner of the Earth. Even tiny, sparsely populated islands that export close to nothing.Among the countries and territories listed on sheets of paper that were distributed to reporters in the White House Rose Garden on Wednesday were Heard Island and McDonald Islands, Australian territories near Antarctica where many penguins but no people live. Also listed were the British Indian Ocean Territory, a collection of islands that are mostly uninhabited aside from U.S. and British soldiers stationed at the joint military bases on Diego Garcia.Some territories face even higher tariffs than their governing nations. Norfolk Island, an Australian territory in the South Pacific Ocean, faces 29 percent tariffs, compared with the 10 percent rate Mr. Trump imposed on the country.“I’m not quite sure that Norfolk Island, with respect to it, is a trade competitor with the giant economy of the United States,” said Prime Minister Anthony Albanese of Australia. “But that just shows and exemplifies the fact that nowhere on earth is safe from this.”In 2023, Norfolk Island exported $655,000 worth of products to the United States, including leather shoes and vehicle parts, and imported $116,000 worth of products from the United States, including chemical fertilizers, according to the Observatory of Economic Complexity, a data visualization platform.Other islands subjected to a 10 percent tariff rate included Tokelau, a territory of New Zealand that has fewer than 2,000 inhabitants. The Norwegian islands of Svalbard, which has about 3,000 residents, and Jan Mayen, where the only humans are the military personnel who operate a weather and coastal services station, were also targeted.The White House did not respond to a request for comment about why certain islands with few or no inhabitants were targeted.Réunion, a French territory east of Madagascar that has a population of less than 1 million, faces particularly steep tariffs, at 37 percent, compared to the 20 tariffs imposed on France. The Falkland Islands, a self-governing British Overseas Territory, will have to pay 41 percent or 42 percent tariffs (the White House gave two different figures), compared to 10 percent rates that Britain faces. More

President Trump announced what could be one of the most drastic economic policy changes in decades on Wednesday, when he substituted America’s longstanding system of taxing imports with a new tariff system of his own devising.The president said the tariffs would reverse decades of what he called unfair treatment by the rest of the world and result in factories and jobs moving back to the United States.“The markets are going to boom” and “the country is going to boom,” Mr. Trump said on Thursday, as global financial markets suffered their biggest rout in years. He added that other countries “have taken advantage of us for many, many years.”Economists’ estimates have been far more grim, with most predicting that the president’s sweeping tariffs and likely retaliation will slow U.S. economic growth, push up costs for consumers and make life difficult for businesses that depend on international supply chains.The president’s measure is both consequential and complicated. Here’s what you need to know.What did the president just do?Mr. Trump announced two big tariff plans that apply to most of the world. One component is a “base line” tariff of 10 percent that will apply broadly to nearly all U.S. imports, except for products coming from Canada and Mexico.The second measure is what the president is calling a “reciprocal” tariff. That levy will apply to 57 countries that Mr. Trump says have high tariffs and other unfair economic practices that have hurt American exporters. He said this is a reciprocal tariff because it will match the way other countries treat the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Volkswagen, the German automaker, has told its car dealers that it plans to add an import fee later this month to the price of imported cars sold in the United States.The company’s move is one of the first and clearest examples of automakers using price increases to deal with the 25 percent tariffs President Trump imposed on car and auto parts imports. The tariffs on vehicles went into effect on Thursday and the levies on parts will become effective on May 3.In an April 1 memo to dealers, Volkswagen said that the exact fees would be determined by the middle of April. The New York Times reviewed a copy of the memo. The automaker also told dealers it planned to cut back on sales incentives and had halted rail shipments of cars to the United States from its plants in Mexico, although shipments by sea continue.Volkswagen plans to hold cars that are subject to the tariffs in port for “the near term.” It also told dealers that the price of the Volkswagen Atlas sport utility vehicle, which is made in Chattanooga, Tenn., could be affected by the tariffs because it includes important imported components. The extent of the impact most likely will not be known until May, the memo said.The automaker, including its Audi and Porsche brands, imports almost all the cars it sells in the United States. Besides the Atlas, Volkswagen also assembles the ID.4 electric sport-utility vehicle in Tennessee.In a statement, Volkswagen confirmed it had sent the memo to dealers because it wanted to be “very transparent about navigating through this time of uncertainty.”“We have our dealers’ and customers’ best interest at heart, and once we have quantified the impact on the business we will share our strategy with our dealers,” the company said.Other automakers are also making adjustments to respond to the tariffs. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, said on Thursday that it is temporarily halting production at a plant in Mexico and another in Canada in response to the auto tariffs.The company said that a factory in Windsor, Ontario, that makes the Chrysler Pacifica minivan and the Dodge Charger muscle car will shut down for two weeks. And a plant in Toluca, Mexico, that makes the Jeep Compass and Wagoneer S will be idled starting on April 7 for the rest of the month.Stellantis said that the production stoppages in Canada and Mexico would force it to lay off about 900 workers in Indiana and Michigan. More

On Thursday morning, Tim Cook, Apple’s chief executive, woke up to the worst day for his company’s stock in five years.Apple shares fell more than 9 percent in response to President Trump’s plan to put steep tariffs on products made abroad. The declines at the world’s most valuable company led a sharp sell-off in tech stocks as the Nasdaq composite index, which is loaded with technology companies, sank nearly 6 percent.Collectively, the largest tech companies, which have been at the forefront of the U.S. economy over the past decade, lost nearly $1 trillion in the day of trading. The declines at Apple, Nvidia, Microsoft, Meta, Alphabet and Amazon resulted in one of the industry’s worst-performing days since the Covid-19 pandemic turned the global economy upside down.Instead of “liberation day,” as Mr. Trump branded his tariff news conference, some market observers began calling it “obliteration day.” Richard Kramer, an analyst at Arete Research, said, “Today is an across-the-board disruption of the American economy, so anything with consumer exposure is getting creamed.”Apple was at the forefront of the tech industry’s drop because it makes almost all of its iPhones, iPads and Macs overseas. The company counts on the sale of those devices for three-quarters of its nearly $400 billion in annual revenue. It will either have to cover the costs of tariffs, cutting into its profits, or pass them on to customers by raising prices, which could reduce the number of devices it sells.The potential hit to the company’s profits triggered one of its steepest declines in its share price during trading since March 2020, when Apple fell 10 percent as fears of the coronavirus triggered a market sell-off. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

For three years, the U.S. economy has been buffeted by rapid inflation, high interest rates and political instability at home and abroad. Yet it has proved surprisingly resilient, supported by the sturdy pillars of robust consumer spending, a rising stock market, and healthy balance sheets for households and businesses alike.But one by one, those pillars have begun to crack under the weight of tariffs and uncertainty. The all-out global trade war that President Trump declared on Wednesday could be enough to shatter what had arguably been the economy’s final source of support, the strong job market.“The strength of the consumer is coming down to the jobs market,” said Sarah House, an economist at Wells Fargo. “And it’s increasingly perilous.”The sweeping tariffs that Mr. Trump announced on Wednesday, and the duties that U.S. trading partners quickly imposed in retaliation, sent stock indexes around the world tumbling on Thursday. The effects won’t be limited to the financial markets: Economists say tariffs will raise prices for consumers and businesses, which will lead employers to pull back on hiring and, if the tariffs remain in place long enough, lay off workers.“If the economy isn’t growing as fast, or it isn’t growing at all, you don’t need as many workers,” Ms. House said.Economists will get their latest glimpse of the job situation on Friday, when the Bureau of Labor Statistics will release March figures on hiring and unemployment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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Ford Motor said on Thursday that it was lowering prices on most of its vehicles to the same levels it charges employees in a bid to boost sales as President Trump’s tariffs on imported cars took effect.The tariffs began on Thursday on vehicles imported from Mexico, Canada, Japan, Germany and other countries. The duties — 25 percent of the value of the vehicle in most cases — are expected to increase prices of new cars and trucks and dampen demand.About half the vehicles sold in the United States each year are produced in other countries. Mexico is the top source of those cars and Canada is among the largest. For three decades, the United States, Canada and Mexico have had a free-trade zone, and automakers have moved parts and vehicles freely among the three countries.Ford’s new program, which the company is calling “From America, for America,” could help reduce a large inventory of unsold cars. In February, Ford had more cars in inventory as measured by how many days it would take to sell them all than all but three other brands — Jaguar, Mini and Dodge — according to Cox Automotive, a research firm.Ford’s new discounts apply to all new 2024 and 2025 vehicles, except for specialty versions of the Bronco sport-utility vehicle; the Mustang sports car; Super Duty versions of F-Series pickups; and a few other models.“Consumers will pay what we pay,” Rob Kaffl, Ford’s director of U.S. sales and dealer relations, said in a statement.The automaker also said it was extending another incentive program in which buyers of new electric models get a home charger for free, along with the cost of installation. That offer is now valid until June 30.Ford had more than 568,000 vehicles in inventory at the end of March, up about 8 percent from a year ago. More