The trade war announced by United States President Donald Trump has begun, threatening the global economy and testing the long -term US alliances in Europe and Asia.

The goods imported from dozens of countries and regions will now be taxed with much higher duties, which is expected to increase the costs for products such as cars, clothes and computers.

These duties – which can reach up to 50% – aim to punish countries that, according to Donald Trump, restrict US exports and cause huge commercial deficits.

Even countries with which the United States have commercial surpluses, that is, they sell them more than they buy, such as the United Kingdom and Argentina, are targeted with a minimum duty of 10%. The highest duties were imposed on two tiny countries that have minimal trading with America, the African kingdom of Lesoto and the French territory of Saint Pierre and Mikelon, off the coast of Canada in the Atlantic.

For decades, global trade has been operating with tariff rates agreed between the United States and 122 other countries in the 1980s and 1990s. On Wednesday, Trump abolished this agreement, accusing the other countries of exploiting the system and “stolen” the United States.

“Our country has been plundered, captured, raped and adorned,” the president from the Rhodes Garden said.

The global financial markets reacted strongly on Thursday. In Wall Street, the Dow Jones industrial index declined 1,679, or almost 4%, while the US dollar fell against other major coins, an indication that investors are worried about the US economy.

“This is changing the game, not only for the US economy but also for the world economy,” said all Sonola, head of US economic research at Fitch Ratings.

“Many countries will probably end up in recession. You can forget most forecasts if these duties remain for a long time. “

Trump does what he said he will do

During his election campaign, Trump had repeatedly threatened with the imposition of a “universal duty” of 10% to 20% on all imports, as he did with the basic duty of 10%.

It also threatened to impose 60% duties on imports from China and ultimately imposed a “reciprocal” duty of 34% in addition to the 20% duties it had announced earlier this year.

Combined with the new duties in China with those left over from his first term, as well as from Joe Biden’s rule, the total tax on Chinese goods will now reach 70%, Capital Economics’ Julian Evans-Prichard said.

“He is extreme, but he is in line with what Trump had promised in his election campaign,” said Erika York, Vice President of Tax Policy at the Tax Foundation.

No one knows whether these duties will prove to be permanent or whether the US will reduce or abolish them if other countries are negotiating to reduce their own duties and other commercial obstacles.

Return 100 years back

Even before Wednesday’s bomb, the president had imposed duties indiscriminately during his second term. He reinstated the 25% duties he had imposed on his first term on steel and aluminum, imposed 25% duties on cars and light trucks, put 20% taxes on imports from China and added 25% duties to some imports from Canada and Mexico.

Yale University Budget Lab estimates that 2025 duties – including Wednesday – will increase the actual US tariff rate to 22.5%. It is a dramatic rise from 2.5% of the previous year and is the highest number since 1909, even higher than that of infamous smoot-Hawley duties imposed by Congress during the Great Recession.

Prior to the ratification of the 16th amendment of the Constitution in 1913, which introduced national income tax, duties were the main source of revenue from the federal government, exceeding 90% in some periods of the 19th century. The US has moved from duties to income taxes to increase state revenue, tax the rich and make the economy more efficient, reducing commercial obstacles and enhancing competition.

Trump wants to return to those times and replace income tax revenue with duty revenue. Last year, duties corresponded to less than 2% of federal revenue, while 51% came from income tax and 36% of social security and Medicare taxes.

Duties threaten US economy but also global

Yale’s Budget Lab estimates that Trump’s 2025 duties will increase consumer prices in the US by 2.3% in the short term, burdening US households with an additional $ 3,800 a year.

The duties that announced “Liberation Day” will only increase prices by 1.3%, according to laboratory calculations – which translates to an additional $ 2,100 tax for each household. Clothing prices will increase by 17%, as higher import duties will hit fabrics from Southeast Asia and Bangladesh.

The Budget Lab also predicts that Trump’s duties will reduce US economic growth, which was 2.8% in 2024, by 0.9 percentage points this year.

The damage will not be limited to the US, but will also expand to Europe, Southeast Asia and China. “We can expect that global economic growth will start to collapse as trade flows are reduced, prices are rising and businesses are postponing investment,” said Wendy Cutler, a former US trade official and current Vice President of Asia Society Policy.

Trump hurts with allies and poor countries

Among the “compensatory” and basic duties, Trump hit allies and opponents, rich and poor countries, as well as countries open and closed to US exports.

Even Singapore, perhaps the freest commercial economy in the world, is burdened with 10%duties, which denies Trump’s allegations that he is trying to balance other countries’ protective policies, said Scott Lincicome, a trade analyst at the Libertarian Cato Institute.

“This is not a mutual one,” Lincicome said. “The assessment of real numbers for foreign commercial obstacles and their impact on US trade would require extensive surveys that would take months, if not years, to complete. … They may have been pulling the numbers by chance. “

Taiwan, a US ally, faces a 32% duty, not far from the 34% of Trump imposed on its geopolitical opponent, China.

Poor countries also have some of Trump’s heaviest duties.

In Lesoto, a small country surrounded by South Africa, a 50%”compensatory” duty was imposed, although its annual per capita GDP is below $ 2,900 (compared to US $ 76,200).

Cambodia, with an annual per capita GDP of about $ 7,200, is charged with a 49%duty. In part, according to the White House, this is because the country functions as a channel for Chinese products that end up in the US, bypassing the duties imposed on China.

Canada and Mexico escaped

Trump’s commercial policies towards America’s northern and southern neighbors have been unstable. He announced twice, but then suspended or relaxed, 25% duties in Canadian and Mexican products, supposed to push them to take stricter measures against the trafficking of fentanyl and illegal immigration to the US.

Last month, Trump suspended 25% duties in Canadian and Mexican products complying with the US-Mexico-Canada Agreement (USMCA), a trade agreement that negotiated during his first term. On Wednesday, the White House announced that imports that meet the USMCA terms will continue to enter the United States in dictatorships.

As soon as the two countries meet Trump’s demands on drug migration and trafficking, the duty for the rest of their imports will be reduced from 25% to 12%, according to the White House.