President Donald Trump’s “reciprocal” tariffs are now officially in place—ushering in the highest practical import duties in over a century and delivering a thumping blow to the global economy, all in the name of remodelling international trade rules. The latest wave of levies brings the cumulative tariff rate on China this year to a staggering 104%, with around sixty other trade partners, including the EU, slapped with hefty duties—20% for Brussels, 49% for Cambodia, and 46% for Vietnam, to name but a few. A flat 10% base rate is now the new norm for most U.S. trade relationships.

Naturally, Trump has declared all this to be a roaring success. “The money is pouring in,” he trumpeted from the White House, claiming $2 billion a day in tariff revenue—presumably forgetting that Americans are the ones paying them. “We’ve been scammed for years,” he added. One might note the irony in solving a problem of economic pain by inflicting more of it.
Markets, as one would expect, are unimpressed. Long-dated U.S. Treasury yields surged past 4.98%, their highest in months, while Asian equities logged a fourth decline in five days. In the hours ahead of the tariffs’ implementation, speculation over a last-minute reprieve was quashed, and volatility ran rampant as Trump flip-flopped between negotiation overtures and aggressive protectionist posture. The ghost of Smoot-Hawley is stirring.

Indeed, effective U.S. tariff rates haven’t reached such heights since 1909—back when William Howard Taft was president and Ford’s Model T still came in just one colour. The message is clear: protectionism is no longer a policy tool but a full-blown economic doctrine.
The global response? Not exactly warm. China has pledged to “fight to the end,” though it has so far withheld immediate retaliation. Canada has already imposed retaliatory 25% tariffs, and EU leaders, of course, are still thinking.

Diplomatic emergency sessions have become the norm. Vietnam dispatched senior officials to Washington in a last-ditch effort to dodge the worst of the blow. South Korea’s interim leader has fielded calls from Trump over everything from LNG purchases to Alaskan pipelines, while Japan’s prime minister urged restraint in a late-night call. The EU, meanwhile, has seen its latest olive branch—offering to scrap tariffs on industrial goods—tossed aside as insufficient.

Wall Street, never known for its subtlety, has begun to rumble with discontent. Some CEOs warned of potentially disastrous long-term damage to U.S. alliances. A Trump backer, Bill Ackman, voiced support but called for a tactical pause. Elon Musk, true to form, resorted to name-calling, branding Trump adviser Peter Navarro a “moron” after being dismissed as a mere “car assembler.”
And just when you thought things couldn’t escalate further, the White House promised more. Pharmaceutical tariffs are apparently imminent, with lumber and semiconductors next in line. Even the once-exempted small parcels from China are under threat. Because why stop at a trade war when you can go for a full-blown trade siege?

Of course, the administration assures us this will all lead to an economic and political renaissance. Trump has predicted a “landslide” in the midterms, citing his tariff blitz as the winning formula. One wonders if he’s reading the same market data as the rest of us.
The last time America dabbled with such aggressive trade policies—see Smoot-Hawley, 1930—it helped tip the world into the Great Depression. History may not repeat itself exactly, but with this much noise, drama, and economic self-harm, it certainly rhymes.