- On 2 April Trump announced ‘reciprocal’ tariffs on almost every country: a minimum of 10% and higher rates for many.
- The European Union was given 20%, and world stock markets plunged in the following days.
- The question is no longer whether there will be tariffs, but how to live with them: real costs, prices, contracts and diversification.
On 2 April 2025, Donald Trump announced ‘reciprocal’ tariffs on almost every country in the world: a minimum of 10% and higher rates for many of them, including 20% for the European Union. The day came to be known as ‘Liberation Day’, a name that reflected the scope intended for the measure.
World stock markets plunged in the following days. The markets’ reaction reflected, more than any specific figure, surprise at the size of the change: a trading system built over decades on common rules suddenly found itself subject to a different logic, in which each country negotiated its own position with the United States. For anyone running a company, the practical consequence was immediate: the costs of exporting to the United States and of competing with products from other countries changed at the same time.
What ‘reciprocal’ means
The name described a system in which the United States would apply to each country a tariff calculated according to its trade relationship with it. In practice it meant a baseline tariff of 10% for almost everyone and higher rates for many, including 20% for the European Union.
The word ‘reciprocal’ suggests symmetrical treatment, but a tariff is always a unilateral decision by whoever imposes it. What matters to a company is not the name but the result: how much more it costs to sell a specific product in that market, from what date and with what exceptions, which are data to obtain from official sources and from the customs adviser. It is wise to be wary of simplifications and headline figures, because the real effect varies greatly depending on the product, the origin of its components and the customs classification.
A historic change
It was the biggest change in US trade policy in almost a century. For decades world trade had been organised around low tariffs and common rules; the announcement called that foundation into question and caused widespread falls in stock markets around the world.
A change of that scale is not absorbed in days. Companies take time to adjust prices, suppliers and routes, and consumers take time to notice the effects in the shops. In the meantime, uncertainty is the dominant factor, and with it the temptation to react to every piece of news. A more useful attitude is to identify calmly which part of the business depends on the conditions that have just changed. Doing so in writing, with someone responsible and a timetable, stops the matter from remaining a general worry.
Living with tariffs
For any exporting company, the question was no longer whether there would be tariffs, but how to live with them. That means knowing the real cost of selling in each market, reviewing prices and contracts, and considering the diversification of customers and suppliers, without waiting for the picture to be definitive.
In practice, it is wise to talk to customers about who bears what share of the cost, to review margins product by product and to explore alternative markets patiently, because opening them takes time. Companies that import should also review their costs, since other countries may respond with measures of their own. Each decision should rest on the company’s own data and not on headlines. And it is worth remembering that the situation could keep evolving, so a periodic review is preferable to a single decision.
When the rules of trade change, the winner is whoever adapts first with judgement, not with haste.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
