US President Donald Trump has unveiled his long-awaited “reciprocal” tariff plan, in a move that sent financial markets reeling amid growing fears of a global trade war.

On Wednesday, Trump announced a 10 percent “minimum baseline tariff” on nearly all imports into the United States. Higher duties on targeted countries will be phased in shortly afterwards.

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He claimed the new import taxes were designed to reduce trade deficits and bring foreign manufacturing back to US shores. He also said they would pave the way for tax future cuts.

As Trump took aim at a global trading system he said “ripped off” the US, his tariffs prompted an immediate backlash, with some of America’s largest trading partners promising countermeasures.

What was announced?

Invoking the International Emergency Economic Powers Act of 1977, Trump announced a 10 percent tariff on all countries, scheduled to take effect on April 5.

Then, he revealed there would be “individualised” tariffs for countries that have large trade surpluses with the US or that impose higher duties on American imports. Those tariffs would come into effect four days later, on April 9.

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Trump explained that his team calculated the “individualised” tariffs by taking half of what he claimed those countries charged the US for its exports.

As such, the European Union is headed for 20 percent tariffs, while the United Kingdom has been slapped with a 10 percent levy.

China, meanwhile, had been assigned 34 percent – on top of the 20 percent tariffs that Trump had already imposed on Chinese imports since coming into office on January 20. Vietnam will be tariffed at 46 percent, and Thailand 36 percent.

Mexico and Canada, the US’s two largest trading partners and its immediate neighbours, were missing from the list but they both already face 25 percent tariffs for all exports to the US that are not covered by the US-Mexico-Canada (USMCA) trade pact.

Reciprocal tariffs will not apply to some goods such as copper, semiconductors, energy, and “certain minerals that are not available in the United States”, according to a White House fact sheet.

Reciprocal tariffs may also be subject to change. According to the White House document, tariffs may be negotiated with trading partners who “take significant steps to remedy non-reciprocal trade arrangements”.

What did Trump say?

“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump told an audience of manufacturing workers, cabinet members and journalists.

“Foreign leaders have stolen our jobs. Foreign cheaters have ransacked our factories. And foreign scavengers have torn apart our once-beautiful American dream.”

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But he proclaimed that Wednesday would mark a turning point in US history, marking an end to the “vicious attacks” he said the country had weathered.

“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed,” Trump said.

“We will charge them approximately half of what they are – and have – been charging us. So, the tariffs will be not a full reciprocal,” Trump said.

“I could have done that, I guess, but it would’ve been tough for a lot of countries. We didn’t want to do that,” he added.

What have target countries said in response?

Within minutes of Trump’s announcement, world leaders began denouncing the tariffs as harmful.

China’s Ministry of Commerce promised “countermeasures to safeguard its own rights and interests” in response to US “bullying,” it said in a statement. US tariffs on China are now effectively at 54 percent.

While Beijing stopped short of saying it would impose retaliatory countermeasures, the statement read “the United States has drawn the so-called ‘reciprocal tariffs’ based on subjective and unilateral assessments, which is inconsistent with international trade rules”.

It urged the Trump administration to cancel the tariffs and “properly resolve differences with its trading partners through equal dialogue”.

For once, Beijing and Taipei appeared to be on the same page.

Taiwan labelled the tariffs “highly unreasonable”. Cabinet spokesperson Michelle Lee said Taipei “deeply regretted” Trump’s announcement of a 32 percent tariff on its exports.

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Australian Prime Minister Anthony Albanese said the tariffs were “not the act of a friend” and “totally unwarranted”.

European Commission President Ursula von der Leyen, responding to a new 20 percent tariff on the EU, called the measure a “major blow to the world economy”.

“The consequences will be dire for millions of people around the globe,” she said, adding groceries, transport and medicine will cost more.

Even Canada, which was exempt from the latest tariffs, chimed in.

“During this crisis, we must act with purpose”, Canadian Prime Minister Mark Carney wrote on social media. “My government will fight US tariffs,” he said.

Which countries will hit back with their own measures?

As reciprocal tariffs won’t kick in until April 9, countries have six days to try to cut a deal with the Trump team. But some may respond with retaliatory tariffs.

Canada is one of several US trading partners which has pledged to respond to tariffs with retaliatory measures.

Meanwhile, the European Union is “ready for a trade war” with the US and could “attack online services”, French government spokesperson Sophie Primas said.

She said the EU was preparing a two-stage rebuttal, with “an initial response”, to be put in place around mid-April, concerning aluminium and steel.

Then the EU also will target “all products and services”, with the measures probably ready at the end of April, Primas said, adding this was still being discussed.

“China is likely going to release some type of retaliation …,” Nick Marro, a principal economist at the Economist Intelligence Unit told Al Jazeera.

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Which countries will likely prefer diplomacy?

Mexico, meanwhile, has demurred. On Wednesday, Mexican President Claudia Sheinbaum said she would avoid pursuing “tit-for-tat” tariffs.

Similarly, British Prime Minister Keir Starmer has ruled out immediate retaliation, promising on Thursday to keep a “cool head … in the coming days”.

Business Secretary Jonathan Reynolds told the House of Commons on Thursday that Westminster is in talks with Washington to secure a deal aimed at avoiding or reducing UK tariffs.

In Asia too, few countries would be willing to take on Trump and risk further retaliation, Marro said.

Aside from China, “a lot of other Asian markets aren’t really in a position to retaliate,” owing to the “importance of the US as a source of final demand,” he said.

Dario Perkins, a managing director at TS Lombard – a London-based financial research firm – broadly agreed and said most countries will favour “other policy levers” over retaliatory tariffs.

“I think that central banks will ease monetary policy [by lowering interest rates to try and boost growth],” Perkins told Al Jazeera.

Still, he said that “global trade will be a lot weaker and international supply chains will be shortened. The multilateral era is dying.”

How have markets responded?

From the US to Asia, markets tumbled as investors braced for sharpest turn towards protectionism by the world’s largest economy since the 1930s.

The Dow Jones Industrial Average lost 2.6 percent on Wednesday, auguring near-term losses for US companies.

Germany’s DAX index fell by 1.7 percent on Thursday, while the CAC 40 in Paris shed 1.8 percent. Britain’s FTSE 100 lost 1.2 percent.

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In Asian trading, Tokyo’s Nikkei 225 index dipped by 4 percent briefly on Thursday, with automakers and banks taking big hits.

As global stocks fell, investors rushed to buy gold – a traditional safe-haven asset during periods of market volatility.

The precious metal hit a record high of $3,167.84 per ounce (28.3g) on Thursday, before paring gains somewhat.

Market players are worried about the dismantling of international supply chains, and the knock-on effects of inflation and even recession, not least in the US.

Goldman Sachs recently raised its estimate for the probability of a US recession during the next 12 months to 35 percent, up from 20 percent previously.

UBS bank circulated a note on Thursday, saying “it’s plausible US real GDP [in 2025] could be compromised by 1.5-2 percent and inflation could rise to close to 5 percent if these tariffs are not reversed soon”.