US announces 10% baseline global tariff on imports, excluding most energy

US President Donald Trump imposed a sweeping new round of tariffs on US imports from major trading partners on April 2, outlining a 10% baseline minimum tariff on all imported goods alongside a sliding scale of reciprocal levies on major US trade partners, while seeming to exclude most energy imports.

In a chart unveiled by Trump at a White House event, the US announced it would now impose a 34% reciprocal tariff on imports from China, on top of already existing duties on specific Chinese goods like automobiles and a 20% tariff on China already imposed during his administration, as well as a 20% tariff on products imported from the EU, among other significant trading partners.

Tariffs on Canada and Mexico were not included in the announcement. A White House spokesperson confirmed to Platts, a part of S&P Global Commodity Insights, in an email that the existing tariff regime outlined in March was still in effect and that neither country would be subject to the 10% baseline global tariff.

"For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect, and are unaffected by this order," the White House said in a fact sheet. "This means [US-Mexico-Canada Agreement] compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff."

"In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12% reciprocal tariff," the fact sheet said.

The American Petroleum Institute, the US's largest oil trade group, praised the administration for excluding energy from the latest tariffs.

"We welcome President Trump's decision to exclude oil and natural gas from new tariffs, underscoring the complexity of integrated global energy markets and the importance of America's role as a net energy exporter," AP President and CEO Mike Sommers said in a statement. "We will continue working with the Trump administration on trade policies that support American energy dominance."

Crude futures fell after the announcement on concerns that the tariffs would weaken demand. By 2300 GMT, NYMEX front-month crude had fallen to an intraday low of $69.53/b, down $2.18 from the April 2 settle.

"We see this level of tariffs and a looming trade war as bearish for the global economy and oil demand and thus bearish for Platts Dated Brent," S&P Global Market Intelligence analysts wrote. "In a pessimistic scenario, where trade wars escalate and are compounded by other adverse factors such as geopolitical conflicts and inflation, S&P Global Market Intelligence estimated that global GDP growth would be downgraded by roughly 1%, leading to a reduction in oil/liquids demand growth by half a million b/d in 2025 and year-on-year oil/liquids demand growth of less than 750,000 b/d for 2025."

Some already-tariffed goods would not be subject to the reciprocal tariff, including "copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products," the White House said.

The tariffs are scheduled to go into effect on April 9, according to the White House.

Among the large US trade partners facing large new tariffs are India at 26%, Japan at 24%, South Korea at 25%, and the UK, which is also subject to the new 10% global minimum tariff.

Trump said the tariffs were designed based on barriers imposed by other governments, and that the US would now charge half the rates other countries levy on US exports. It was not immediately clear how the administration arrived at its calculations.

At the event, Trump characterized the decision to put reciprocal rates at half of other countries' duties as "kind."

"We're going to start being smart, and we're going to start being very wealthy again," Trump said.

Minerals impacts

While the continuation of the USMCA exemption for Canadian and Mexican crude likely made US energy impacts minimal, the move could significantly affect US buyers of metals and minerals.

In 2024, US imports made up more than half of US consumption for 46 nonfuel mineral commodities, according to the US Geological Survey. For 15 of those materials, including those crucial to the defense and technology industries, such as gallium, graphite and certain rare earth elements, the United States is 100% reliant on imports.

At the top of the Trump administration's new list was 34% tariffs on products from China. China is the lead producer of 30 of the 44 products the USGS deems "critical minerals."

While the administration's stated aim has been to increase the domestic production of goods, mining activity is constrained by resource location and availability and is subject to long lead times from discovery to production. The impacts could be far-reaching, given the crucial role many minerals play in various supply chains and the limited options for quickly sourcing materials domestically.

The sweeping action will impact countries in various ways. For example, it places 15% tariffs on Norway's products, a leading import source for the cobalt vital to electric vehicle batteries and other applications, for which the US was 76% reliant upon imports. The US will place 10% tariffs on both products from Jamaica, the country's top source of bauxite for aluminum production and on Chile, a primary source of lithium brought into the US.

The announcement makes exceptions for a few products, including copper and precious metal bullion. Adding to the uncertainty around the announcement, however, is that the tariffs will exclude "other certain minerals that are not available in the United States," but those were not specified.

The US steel sector has typically favored the president's protectionist policies. The American Iron and Steel Institute swiftly expressed support for new tariffs, though the administration noted that the new tariffs do not include steel/aluminum articles subject to previously announced Section 232 tariffs.

Congress reacts

Lawmakers in the US Senate and House of Representatives largely reacted along party lines to Trump's economic shakeup April 2.

"The United States and American workers will no longer be ripped off by other countries with unfair trade practices," Republican Speaker of the House Mike Johnson said in a post on X. "Thank you President Trump for putting America's workers and innovators first with reciprocal tariffs that level the playing field and make trade FAIR."

"President Trump's across-the-board tariffs will sow chaos and uncertainty – and working Americans will bear the cost," Senator Michael Bennet, Democrat-Colorado, posted on X.

"President Trump is going to charge foreign countries roughly half of what they already charge us to do business," Senator Markwayne Mullin, Republican-Oklahoma, wrote. "Literally who can argue with this?"

Still, Trump’s tariffs led to fractures within Republican ranks. A few hours after April 2's announcement, four Republican senators joined with Democrats to vote for a disapproval resolution, proposed by Senator Tim Kaine, Democrat-Virginia, to rescind the emergency powers Trump used to justify tariffs on Canada.

In an April 2 post on Truth Social, Trump called the four – Susan Collins of Maine, Mitch McConnell and Rand Paul of Kentucky, and Lisa Murkowski of Alaska – "unbelievably disloyal" for their opposition to the tariffs.

Paul in an April 2 interview with The Hill stressed his opposition to Trump's tariff policy.

"The people who are for tariffs are just wrong," Paul said. "For example, with Canada, you put a tax on things coming in and out of Canada, what you'll find is it just leads to higher prices for consumers."