(Yicai) April 3 -- US President Donald Trump’s newly imposed "reciprocal tariffs" on imports have far exceeded market expectations, threatening to destabilize the global economy with the potential for further escalation.

The US will impose a baseline 10 percent tariff on all global imports effective April 5, according to documents released by the Trump administration yesterday.

However, certain economies will face even higher import duties: 34 percent on China, 20 percent on the European Union, 24 percent on Japan, 46 percent on Vietnam, and 26 percent on India, tentatively set to take effect on April 9.

Tariff Hikes Surpass Forecasts

This round of tariffs marks a significant expansion in scope, extending from selective nations to a global scale, with major economies facing rates exceeding 20 percent. Analysts had predicted rates would not exceed 15 percent on key trading partners.

Notably, China, already subject to 20 percent tariffs, was expected to avoid further escalation, so the additional 34 percent tariff signals heightened trade tensions.

Looming Economic Fallout

The sweeping US tariffs risk triggering a global trade contraction and economic slowdown.

A report released last month by the Organization for Economic Cooperation and Development warned that uncertain US tariff policies would further dampen growth, revising down 2025 and 2026 global gross domestic product forecasts by 0.2 and 0.3 percentage points to 3.1 percent and 3 percent, respectively.

For China, the tariffs will hit exporters, undermining trade and economic growth. Additionally, Trump revoked duty-free privileges for low-value cross-border e-commerce parcels, exacerbating export challenges.

The rising cost of exports could also affect China indirectly. First, global demand may decline as tariffs weaken economic activity worldwide. Second, it could lead to higher transshipment costs for Chinese goods routed through third countries such as Mexico and Vietnam.

Third, US allies such as Canada and Mexico might consider restricting Chinese imports in exchange for tariff exemptions.

Policy Trajectory

The Trump administration is expected to adjust its tariff implementation based on foreign responses, offering exemptions to compliant economies while escalating rates against retaliatory partners.

Ongoing US trade investigations and Trump’s recent rhetoric suggest further tariff increases, potentially targeting critical goods, including copper, timber, semiconductors, and agricultural products.

To counter US protectionism, economies such as China must strengthen regional cooperation. On March 30, economic and trade ministers from China, Japan, and South Korea convened after a five-year hiatus, pledging to enhance collaboration and accelerate free trade agreement negotiations to mitigate US tariff impacts.

The author is the chief economist at Yuekai Securities.

Editors: Dou Shicong, Emmi Laine