U.S. President Donald Trump announced a new set of levies on Wednesday, imposing a 10 percent baseline tariff on imports from all trading partners and higher rates on certain ones.

Those "reciprocal tariffs" will take effect on April 5 and 9 respectively, a move that could destabilize global markets, harm U.S. consumers, and undermine efforts to revive multilateral trade cooperation.

While the Trump administration argue that these tariffs are necessary to protect U.S. industries, reshore manufacturing and reduce deficits, the decision has met with sharp criticism from economists, trade experts and foreign governments. Many see it as a misguided attempt to use tariffs as a blunt instrument in addressing complex trade imbalances.

Sweeping tariffs

In a decisive move to overhaul U.S. trade policy, Trump announced the tariffs during a speech in the White House Rose Garden. He declared April 2 as "Liberation Day," saying, "This is one of the most important days in American history."

The president held up a chart, showing the United States would charge specific "reciprocal tariffs" on roughly 60 "worst offenders," including a 20 percent duty on imports from the European Union (EU), 25 percent on South Korea, and 24 percent on Japan.

Additionally, a 25 percent tariff has been imposed on all foreign-made automobiles. Trump explained the rationale behind these measures, saying, "In many cases, the friend is worse than the foe in terms of trade." He further said, "We subsidize a lot of countries and keep them going and keep them in business. Why are we doing this?"

According to Trump's logic, these tariffs are designed to counteract perceived unfair trade practices and stimulate domestic manufacturing by making imported goods more expensive. Trump framed the tariffs as a strategy to revive U.S. industry and domestic production, urging foreign governments to "terminate your own tariffs. Drop your barriers."

Self-defeating move

Economists warn that the tariffs are likely to lead to increased consumer prices, contributing to inflation.

The budget lab at Yale University estimates that the tariffs announced on Wednesday are expected to raise consumer prices by approximately 1.3 percent in the short term, costing the average household an additional 2,100 U.S. dollars. When combined with existing tariffs, that could raise consumer prices by 2.3 percent, leading to a loss of purchasing power of 3,800 dollars per household.

Furthermore, these tariffs are anticipated to dampen U.S. economic growth both in the short and long term.

On Wednesday, S&P 500 futures tumbled 3 percent, suggesting investors expect deep losses when Wall Street opens on Thursday. Other stock markets around the world and treasury yields fell too.

"This wave of protectionism will produce only losers. The primary casualties will be American consumers, who will bear the brunt of these tariffs through rising inflation and a shrinking selection of goods," Hildegard Mueller, president of the German Association of the Automotive Industry, said in a statement.

Furthermore, such measures dampen competitive pressure on U.S. businesses, weakening their drive for innovation and, in turn, their international competitiveness in the long run, Mueller added.

Universal backlash

From political leaders to trade associations, the international community has expressed a mix of criticism, concern and caution in response to the U.S. tariffs.

European Commission President Ursula von der Leyen expressed deep regret on Thursday over the U.S. move, warning that the impact could be devastating.

In a statement, von der Leyen said that Trump's announcement of universal tariffs on the whole world, including the EU, is a major blow to the world economy.

"The global economy will massively suffer," she said. "Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe."

French government spokesperson Sophie Primas said on Thursday that the EU will impose retaliatory tariffs on all goods and services from the United States by the end of April, as the EU is ready for the trade war.

Italian Prime Minister Giorgia Meloni on Wednesday night criticized Trump's decision to impose tariffs on the EU, calling it "a mistake that benefits no one."

She said that Italy will work to reach an agreement with the United States to prevent a trade war.

"We will do everything we can to reach an agreement with the United States to avert a trade war, which would inevitably weaken the West and strengthen other global actors," Meloni said.

Shevaun Haviland, director general of the British Chambers of Commerce, said that no one will escape the fallout from those tariffs, warning of an increased risk of trade diversion that will wreak havoc on business communities across the world.

"Orders will drop, prices will rise, and global economic demand will be weaker as a result. This is a lose-lose situation for everyone," Haviland said.

Japan's Chief Cabinet Secretary Yoshimasa Hayashi on Thursday expressed "serious concern" about the U.S. decision to impose reciprocal tariffs, questioning its compliance with World Trade Organization rules and a bilateral trade agreement.

At a press conference, he said that Tokyo has strongly urged Washington to retract its decision to slap a 24 percent levy on Japanese products as part of the reciprocal tariffs.

The U.S. administration's tariff plan could have a "big negative impact" on the global economy and the multilateral trade system, Hayashi said.

South Korean Prime Minister Han Duck-soo, who is serving as acting president following the impeachment of President Yoon Suk-yeol, said Thursday that the government will use all available measures to tackle U.S. tariff imposition.

"As the global tariff war is coming to a reality, the government should pour out all of its capabilities to overcome a trade crisis," Han said during an emergency meeting for economic security strategy attended by economy, industry and trade ministers.

The acting president instructed the industry minister to closely analyze the details and impact of the U.S. tariff imposition and actively engage in negotiations with the United States for the purpose of minimizing damage.

Trump's latest move is not merely an economic miscalculation but a desperate attempt to resolve capitalism's internal contradictions through coercive state intervention, said Busani Ngcaweni, a senior research associate at the University of Johannesburg.

This strategy represents an attempt to artificially reverse the globalization of capital and division of labor by forcefully nationalizing production through protectionism, he added.