Despite rattled financial markets, threats of retaliation and some of President Donald Trump?s biggest supporters encouraging him to back off his signature economic policy, he didn?t give in. His administration piled on heaps of new ?reciprocal? tariffs Wednesday on dozens of American allies and adversaries alike, aiming to ? as he claims ? restore fairness and boost American manufacturing.

Goods from China, by far the biggest target, are now subject to at least a 104% tariff. Trump tacked on even higher tariffs than initially announced after Beijing didn?t back off its promise to impose 34% retaliatory tariffs Tuesday.

The reciprocal rates, which aren?t exactly reciprocal, were calculated by dividing a country?s trade deficit with the US by its exports to the country and multiplying by 1/2. They range from 11% to a whopping 50%. Barring Mexico and Canada, America?s other top trading partners were hardly spared in this round. The EU was hit with a 20% reciprocal tariff, China at 34%, Japan at 24%, Vietnam at 46% and South Korea at 25%.

These new rates come just days after Trump imposed a 10% universal tariff on all countries? imports, aside from Mexico and Canada. (The 10% rate is not additive for countries on the reciprocal tariff list. For instance, Japan?s tariff rate increased by 14% on Wednesday given the 10% was already levied over the weekend.)

?Our country and its taxpayers have been ripped off for more than 50 years. But it is not going to happen anymore,? Trump said last week when announcing the tariffs, the highest the nation has seen in over a century.

Hours before the tariff went into effect Tuesday, Trump made similar comments on, adding that other countries, especially China, have ?left us for dead, frankly.?

Now, Americans and people across the world are set to pay a steep price. Importers, not the countries Trump targeted, will pay the tariffs, and those costs often get passed onto wholesalers, retailers and ultimately consumers. But businesses abroad won?t be off the hook either, with Americans likely to source goods from countries with lower tariff rates.

Ultimately, Trump?s tariffs threaten to escalate a global trade war. China, already set to escalate its retaliation against US, vowed to double down even more. China?s Commerce Ministry said Tuesday the country would ?fight to the end? of the trade war.

Trump, meanwhile, said in a Truth Social post on Tuesday that ?China also wants to make a deal, badly, but they don?t know how to get it started.?

Recession and stagflation in the spotlight

With several trillion dollars in the market value of US stocks wiped away in the days since April 2 ?Liberation Day,? forecasts of an outright global recession have grown.

JPMorgan has raised the chances of a global recession to 60% by the year?s end from 40% if Trump carries out the full plan he laid out last week.

?The tariff hikes since the start of the Trump administration now amount to the largest US tax hike in nearly 60 years,? the bank?s economists said in a note last week. ?This would have direct ramifications on household and business spending and ripple effects through retaliation, a slide in business sentiment, and supply chain disruptions.?

American consumers will pay $2,100 more a year on average because of Trump?s tariffs, the nonpartisan Tax Foundation says.

Since returning to the White House, Trump has been busy. Even before last week, he had previously announced a 20% tariff on all Chinese imports and 25% tariffs across all steel, aluminium and car imports.

Meanwhile, earlier in the week, Goldman Sachs upped its forecast for a US recession in the next 12 months to 45%, a 10 percentage point increase from prior predictions. In a note titled ?Countdown to a Recession,? the bank?s economists said they ?had expected the White House to announce a more aggressive tariff at first and then scale it back somewhat.?

Unless all of the enacted tariffs are significantly revised, Brian Bethune, an economics professor at Boston College, predicts the US economy will enter a recession by the second quarter of this year. Even more concerning, tariffs could ignite stagflation, a scenario when economic growth declines significantly and inflation heats up.

?The probability of stagflation is 100%,? he told CNN, adding that inflation from Trump?s tariffs will hit consumer price levels by May and accelerate further in June and July.

Not everyone is predicting a recession, though. Morgan Stanley analysts on Tuesday said the US would avoid recession ? because they believed Trump would ultimately strike deals with countries to lower tariffs. And Trump?s chief trade adviser, Peter Navarro, told Fox News Monday evening that he guaranteed the US economy would not plunge into a recession.

Despite dozens of countries offering to negotiate, it?s not clear that deals can be worked out quickly ? if at all. Trump and members of his administration have said that what they consider non-tariff trade barriers ? which include currency manipulation, tax policies viewed as unfair and the use of sweatshop labor ? are more important than tariffs. That?s why they?ve rejected various nations? offers to set their tariffs to 0% on US goods in exchange for the same treatment.

Hitting the world?s second-largest economy

Trump?s tariffs have hit the world?s second-largest economy, China, the hardest. Now Beijing is going head-to-head with its larger rival, the US, in a full-blown trade war.

When Trump?s first term ended, the US charged an average tariff rate of 19.3% on Chinese goods, according to a Peterson Institute for International Economic analysis. The Biden administration kept most of Trump?s tariffs in place while also adding additional ones, bringing the average rate to 20.8%.

Both China and the US have benefited from decades of trade. But since Trump?s first term, the US has looked to other countries for goods it had previously imported from China.

Mexico has been a top beneficiary, having overtaken China to become America?s top source of imports in 2023, a position that it maintained last year. Several Asian countries, including Vietnam, South Korea and Taiwan, have also seen trade flows to the US surge since Trump?s first term.

That?s not to say the 104% tariff on Chinese goods won?t matter ? it very much will ? and they could easily go even higher. Even with pre-existing tariffs in place, China was still the second-biggest source of foreign goods last year, according to US Commerce Department data.

China shipped a total of $439 billion worth of goods to the US in 2024, while the US exported $144 billion worth of goods to China. The country also remained the top foreign source of several items.

The mutual tariffs threaten to hurt domestic industries and are poised to result in layoffs.

If Trump were to cancel his tariffs, which he?s repeatedly vowed not to, much of the economic damage could be undone ?but certainly not all,? Colin Grabow, associate director at the Cato Institute?s Herbert A. Stiefel Center for Trade Policy Studies, told CNN.

?Trump?s actions have significantly hurt US credibility, not only through the tariff?s flimsy justifications but also the violation of long-standing free trade agreements with US trading partners,? he said. ?Businesses need a certain degree of certainty in which to operate, and Trump?s chaotic approach is not providing that.? (CNN, but headline rejigged)

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