Trump’s “Declaration of Economic Independence” means global chaos

The US President’s Global Tariff Program will reach all countries abroad, including New Zealand, and dramatically increase prices at home.

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In a dramatic and covered speech of the White House Garden Flag, Donald Trump announced today what he called the “Declaration of Economic Independence”-a broad global tariff program that will impose new import rights on almost all US business partners. “On April 2, 2025, it will be remembered forever when the day the American industry was reborn, the destination of America was recovered and the day we begin to make America rich again.” The president declared.

The central part of the policy is a 10% base line rate in all goods in all countries, except Canada and Mexico, which have already been hit by tariffs of up to 25%. In addition to the 10%standard, which is what New Zealand will pay, 60 nations labeled as “worst criminals” It will be hit by reciprocal tariffs mirroring the duties they place in American goods. Some of the sharpest increases in China (34%, at the top of its existing 20%tariff), Vietnam (46%), Cambodia (49%) and EU (20%). A 25% separate tariff in foreign cars will also enter midnight. “For years, workers US citizens have been forced to sit on the sidelines, while other nations have become rich and powerful, very at our expense,” said Trump. “But now it’s our turn to thrive.”

‘Worse than the worst scenario’

Wall Street did not share Trump’s sense of triumph. The markets, which closed higher at the beginning of the day, fell into negotiations after business hours, as the scale of new tariffs became clear. Dow’s futures fell over 250 points, the S&P 500 fell almost 1.7%and Nasdaq 100 slid 2.5%. “This is worse than the worst scenario of tariffs many in the market expected.” said Jon Fortt of CNBCstunned by the breadth of the measurements.

Economists were equally alarmed. Justin Wolfers, Writing in Bluesky. Michael Pearce from Oxford Economics echoed the feelingsaying that the surprise gravity of the ad would force him to review his inflation forecast in the US even higher than it is now. While Trump insists that tariffs will revive US manufacturing and reduce national debt, critics argue that they can trigger global retaliation, increase consumer prices, and bring US approaching recession.

What does this mean to New Zealand

Speaking to reporters, Minister of Commerce, Todd McClay, said that although the tariff of 10% of exports to the US was a bitter pill to swallow, New Zealand had turned off relatively slightly. According to Thomas Manch in the post (Paywalled), New Zealand exported about $ 9 billion in goods to the US last year; With a 10% rate that would signal about $ 900 million in costs, which McClay said it would probably be used “by American consumers, non -exports in New Zealand.” He said the government will be “working closely with our exporters during today’s course … to get as much information as possible.”

The minister said he would ask commercial employees in Washington to raise a seemingly misleading US claim that New Zealand imposes a 20% rate on US imports – in fact, the average fare is 1.9%. Westpac chief economist Kelly EckHold told RNZ that the US probably reached this number through “a combination of the GST rate and we have some tariffs against the US in some products defined at a minimum agreed level of the WTO.” But given the explanation, she said she made no sense that the declared rate for Australia was 10%. “They also have a GST and, likewise, the UK is also valued at 10 and have a value added tax.”

A new world commercial order arises

For global markets, it’s all bad news – but in the long run, perhaps not as bad as it seems. Amid the chaos of Trump’s trade war, countries are quietly building a new commercial architecture that completely ignores the United States, writes the economist (Paywalled). The comprehensive and progressive agreement of the transpacific partnership, or CPTPP, was once an initiative led by the Americans, but the 12-member pact includes New Zealand-Agora thrives without him. Meanwhile, Europe ran to sign agreements with MercosurMexico and others, driven in part by Trump’s previous tariff shocks.

These efforts reflect a US decline dependence, whose portion of global imports has decreased from one fifth at the turn of the century to just one eighth today. Since services now dominate the US economy, the demand for imported Plateau goods – and this represents an economic opportunity for other countries. “The EU and its open market allies can form a formidable block-responding coordinating American tariffs and pulling China in a freer direction,” writes the economist. “Even without China, however, the open market block is large enough to rebuild a commercial order of the wreckage of Trump’s war. This may be a dark time for free-command, but there are glimpse of hope.”