"President Trump's biggest tariff blitz yet sends a clear message to U.S. and foreign companies alike: The era of globalization is over.
Trump's "Liberation Day" plan to impose sweeping new duties on trillions of dollars in imports shows the White House wants goods sold to American consumers to be built in American factories -- bringing down the curtain on U.S. support for the turbocharged globalization that powered the world economy for decades. The new tariffs include a baseline duty of 10% on foreign imports and larger so-called reciprocal tariffs, with China facing total duties of 54%, Vietnam 46% and the European Union 20%.
"Jobs and factories will come roaring back into our country and you see it happening already," Trump said in a Rose Garden ceremony on Wednesday. To any company or country that complains, he said: "If you want your tariff rate to be zero, then you build your product right here in America."
Trump's Made-in-America ambitions mean that a gusher of investment that in recent years showered low-cost manufacturing destinations such as Vietnam, as well as U.S. allies such as South Korea and Japan, is set to dry up. Firms are reconsidering their options for where best to spend their investment dollars.
"The U.S. has been at the center of globalization," said Andre Sapir, a former EU official who is now economics professor at the Free University of Brussels. "Now the U.S., the center, wants to pull away."
In the weeks since Trump took office, a flurry of announcements by companies including iPhone maker Apple, South Korean carmaker Hyundai and drugmakers Johnson & Johnson and Eli Lilly signal that multinationals are gearing up to expand operations in the U.S. in response to Trump's tariffs.
Yet untangling the world's supply chains and relocating them to the U.S. in the way Trump wants is a daunting task, given the costs involved. There is the risk Trump will lower tariffs if he can use them to wring concessions on trade from other countries, executives say. Economists warn the world could face a growth-sapping investment crunch as companies sit on the sidelines until the trade-war fog clears.
"Shifting things around is going to be quite complicated," said Derrick Kam, Asia economist at Morgan Stanley.
The president's hope is that high tariff walls will usher in a golden age of plentiful manufacturing jobs and widespread prosperity. He blames predatory trade practices by China, the European Union and other trade partners for sucking jobs and industries overseas.
The U.S.'s two largest trading partners, Mexico and Canada, were spared new tariffs Wednesday, with any goods compliant with their free-trade agreement still subject to no duties. But both countries still face 25% duties that Trump imposed on a large share of their exports not covered by the agreement and the ongoing threat that the president could blow up the deal over non-trade issues like drugs and migration.
On Wednesday, Trump singled out China. It was the biggest beneficiary of the offshoring trend, over decades building factories that started with toys and clothes and today make high-tech cars, machinery and electronics. It dominates global manufacturing, with a trade surplus last year of $1 trillion.
A new 34% tariff on China announced Wednesday will be additive to previous duties imposed by the Trump administration, like the 20% tariff Trump imposed over its role in the fentanyl trade. That means the base tariff rate on Chinese imports will be 54% after April 9.
If Trump ends up imposing additional 25% tariffs on China for purchasing Venezuelan oil, then the tariff rate would bump up to 79%.
Driven by geopolitical tensions between Washington and Beijing and the trauma of the pandemic, multinationals added new production bases outside of China to keep their operations running smoothly in the event of disruption from shipping delays, natural disasters, economic sanctions or conflict. Apple began making some iPhones in India.
At the same time, Chinese companies built their own overseas production facilities, in part to escape competition in their cutthroat domestic market but also to keep serving multinational clients and to sidestep U.S. tariffs. Mexico and Vietnam have been popular destinations, thanks to low costs and, in Mexico's case, tariff-free access to the U.S. market.
For the U.S., the result has been a fall in the share of its imports coming from China but widening deficits with Vietnam, Mexico and other countries. The U.S. current-account deficit, a measure of trade and income from overseas, in 2024 reached $1.1 trillion, underscoring to Trump and his allies the need to revamp global trade.
Trump has taken his trade war to adversaries and allies alike, whom he accuses of taking advantage of the global trading system the U.S. nurtured after World War II by pushing exports and restricting imports. Some analysts say such policies do drive U.S. trade deficits, though most mainstream economists cite the U.S.'s persistent budget deficits and low savings rate as the principal drivers of the trade gap.
There are signs Trump's strategy is having an effect. Around half of German engineering businesses want to boost U.S. investment, as a result of the tariffs and the size of the market, according to a November survey by the German Mechanical Engineering Industry Association, or VDMA, a lobby group. Most members "look to the U.S. as a growth opportunity," said Andrew Adair, a VDMA official.
German engineering giant Siemens said last month it would increase by $10 billion its investments in the U.S., its largest market. That includes new manufacturing facilities for electrical products in Fort Worth, Texas, and Pomona, Calif., creating more than 900 skilled manufacturing jobs, the company said. Taiwan Semiconductor Manufacturing said last month that it plans to invest at least $100 billion more in chip-manufacturing plants in the U.S. over the next several years. On Wednesday, Trump said Taiwan would face 32% tariffs, though semiconductors would be exempted.
Taiwanese electronics companies Foxconn, Compal and Inventec said they are seeking new investments in Texas, looking to secure land for AI-server manufacturing that could rival the scale of their existing operations in Mexico.
Yet, despite these pockets of activity, measures of business-investment intentions published by the Federal Reserve suggest that across the economy, corporate spending plans are being scaled back amid the tariff uncertainty.
Many companies have invested hundreds of billions of dollars in globe-spanning production networks that can't easily be dismantled. And U.S. manufacturing is geared toward advanced technology and doesn't have ready domestic supplies of basic materials and components that can be much more cheaply produced overseas.
"You can't just put on tariffs and flip a switch and all of a sudden America is an industrial nation again," said Dan Digre, president and chief executive of Misco Speakers, a St. Paul, Minn.-based manufacturer of audio systems.” [1]
1. With New Trade Regime, U.S. Aims To Topple the Age of Globalization. Douglas, Jason; Fairless, Tom. Wall Street Journal, Eastern edition; New York, N.Y.. 03 Apr 2025: A1.
