Business Leaders: Tariffs Hike Prices for US Consumers

President Donald Trump announced plans for sweeping tariffs Wednesday, saying "our country has been looted, pillaged, raped, plundered" by other nations.

The aggressive language came as Trump showed a willingness to shake up a global economic system that the United States helped to build after World War II. Trump held up a chart while speaking, showing the United States would charge a 34% tax on imports from China, a 20% tax on imports from the European Union, 25% on South Korea, 24% on Japan, and 32% on Taiwan.

"Taxpayers have been ripped off for more than 50 years," Trump said in remarks at the White House marking the occasion, which he had billed as America's "Liberation Day."

"But it is not going to happen anymore."

New Zealand's trade minister, Todd McClay, said the tariffs announced on his country's goods were "not unexpected" and would "have an impact" on exporters.

McClay told reporters that officials were awaiting more detail about what the announcement meant for the Pacific nation of 5 million people and how it would be implemented.

"It is important to note that many other countries around the world are facing much higher tariff rates than New Zealand exporters will be," he said.

McClay said New Zealand "won't be looking to retaliate."

"That would put up prices on New Zealand consumers, and it would be inflationary," he said.

AFL-CIO President Liz Shuler said strategic tariffs can be an effective tool for supporting U.S. industries and protecting jobs, but they must be accompanied by policies that invest in manufacturing and promote workers' right to organize.

"Unfortunately, the Trump administration's attacks on trade union workers' rights at home, gutting of the government agency that works to discourage the outsourcing of American jobs and efforts to erode critical investments in U.S. manufacturing take us backward," Shuler said in a statement. "We will continue to fight for trade policy that prioritizes the interests of working people without causing unnecessary economic pain for America's working families."

Treasury Secretary Scott Bessent told Fox News that one of the purposes of the tariffs "is setting the stage for long-term economic growth."

"With our gigantic government spending, it was unsustainable," Bessent said. "We have taken us off that trajectory, and we're putting us back on a sound trajectory."

When asked how countries like China, which will see a 54% total tariff rate on imports, should respond, Bessent said, "We'll see what they do."

"My advice to every country right now: Do not retaliate," he said. "If you retaliate, there will be escalation."

Mexico and Canada, excluded from the list of reciprocal tariffs due to the trilateral free trade agreement between the countries, may stand to gain by Trump's announcement, said Gabriela Siller, economic analyst of the Mexican financial group Banco Base.

Mexico is still affected by a number of more limited tariffs on steel and aluminum and may be subject to tariffs down the line as the administration continues to put pressure on the country to control fentanyl production and migration.

But dodging broader measures by the Trump administration on Wednesday could give Mexico a competitive market edge "despite Trump's protectionist rhetoric," Siller said.

"It's bad news for the world," Siller said. "Still, it's good news for Mexico. ... Tariffs will surely lower what (these countries) sell to the United States. That opens up an opportunity in the market."

Alfred Mai, the founder and CEO of ASM Games, a card game company in San Francisco that sources all of its items in China, called the new tariffs a "disaster for everyone — my business, American small businesses across the board, American consumers."

He said the 34% tax on Chinese goods is occurring as he is about to place his big order for the fourth quarter, which accounts for 60% to 70% of his business.

"My only hope now is that they negotiate out of this before the first shipments come in to U.S. ports for Christmas sales," he said. "There's no other action I can take at this point outside of hoping."

Otherwise, Mai said he will be forced to raise prices or reduce quality.

The U.S. imports about 80% of its seafood, most of which will now face much higher duties.

"Tariffs will raise the cost of seafood, making the healthiest animal protein on the planet less available and more expensive," said Lisa Wallenda Picard, president and CEO of the National Fisheries Institute. "Meanwhile, the tariffs could threaten many of the 1.6 million American jobs that, according to the federal government, U.S. commercial seafood companies support."

The leading sources of U.S. seafood include Canada, Chile, India, Indonesia and Vietnam. India will now face tariffs of 26%, Trump said, while Vietnam has been hit with a 46% tariff.

Basic Fun CEO Jay Foreman, whose company is behind such classic toys as Tonka trucks, Lincoln Logs and Care Bears, has been working hard to come up with new ways to cut tariff-related costs like reducing packaging and eliminating batteries with the products.

But Trump's announcement that he plans a 34% increase in tariffs on Chinese imports has solidified his decision to hike prices. Most of the company's toys are made in China. He said the Tonka Mighty Dump Truck will go from $29.99 to $39.99 this holiday season, possibly even $45.

"There is no other way," he said.

Michelle Korsmo, the president and CEO of the National Restaurant Association, said the tariffs come at an especially difficult time for the U.S. restaurant industry, which has seen food costs rise 40% over the last five years.

Tariffs will further increase food, beverage and packaging costs and push up prices for diners, Korsmo said, adding that operators also worry about the continuing availability of fresh, imported ingredients.

"Restaurant operators source as many domestic ingredients as they can, but it's simply not possible for U.S. farmers and ranchers to produce the volumes needed to support consumer demand," Korsmo said in a statement.

Italy's conservative Premier Giorgia Meloni said the introduction by the U.S. of new tariffs against the European Union is a "wrong" measure that doesn't favor either side.

"We will do everything we can to work towards an agreement with the United States, with the aim of avoiding a trade war that would inevitably weaken the West in favor of other global players," Meloni said in a Facebook post. "In any case, as always, we will act in the interest of Italy and its economy, also by discussing with other European partners."

He said for the 60% in tariffs that South Africa was imposing on U.S. goods, the U.S. would apply a 30% reciprocal tariff on South African goods into the U.S. These products include products such as textiles and agricultural goods like citrus fruits. He repeated his claim that there were "bad things happening in South Africa."

"We're paying them billions of dollars, and we've cut the funding because a lot of bad things are happening in South Africa," he said.

Economist Miyelani Mkhabela said the 30% tariffs were directly linked to the Trump administration's diplomatic fallout with South Africa.

"The United States has become unpredictable, unreliable, and oppressively destroying the African continent," Mkhabela said.

South Africa's trade and industry minister Parks Tau said South Africa would seek a meeting with U.S. officials to discuss the latest developments.

Trump has signed an executive order that the White House said would close a "loophole" on small-ticket imported goods from China.

The action seeks to scrap exceptions that had shieled from tariffs imported goods from China worth less than $800.

This is legally known as the "de minimis" treatment. It suggests that the cost of what's being imported was too low to merit a tariff.

Trump's action means goods from China would no longer get the exception.

His new round of sweeping tariffs also seeks to end similar exceptions for imports from all countries, but only once the U.S. government has the personnel to properly process such imports.

That means imported goods from most of the world worth less than $800 would eventually also lose their exceptions.

The makers of Parmigiano Reggiano cheese said the additional 20% tariff would raise to 35% duties on imports of the Italian hard cheese to the United States, its chief export market with a 22.5% share.

"Certainly the news does not make us happy, but Parmigiano Reggiano is a premium product and the increase in price does not automatically lead to a reduction in consumption," Nicola Bertinelli, president of the Parmigiano Reggiano Consortium, said in a statement.

He said they intend to negotiate in a bid to drop the additional tariff since Italian Parmigiano Reggiano — made exclusively with milk produced in a defined area of the Emilia Romagna region and aged for at least 12 months — is not in competition with U.S.-made parmesan cheese. He called it "absurd" to hit a product like Parmigiano Reggiano to protect the American market.

Business Secretary Jonathan Reynolds said the government hoped to strike a trade deal to "mitigate the impact" of the 10% tariffs on British goods imposed by Trump.

The U.K. government has been negotiating with the U.S. on a trade deal in hope of escaping import taxes.

Reynolds said "the U.S. is our closest ally, so our approach is to remain calm and committed."

British officials have said they will not immediately retaliate, an approach backed by the Confederation of British Industry, a major business group.

"U.K. firms need a measured and proportionate approach which avoids further escalation, the group's CEO, Rain Newton-Smith, said. "Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices."

The tariff levels are higher than many economists anticipated, causing stock markets to fall in after-hours trading.

"This is clearly worse news on tariffs than we had forecast," said Michael Pearce, deputy chief U.S. economist at Oxford Economics, a consulting firm.

Pearce said he will raise his forecast for inflation this year and reduce his expectation for growth in the wake of Trump. He was already forecasting inflation to top 3% later this year, from roughly 2.5% now.

The president has wrapped up his speech announcing sweeping tariffs on U.S. trade partners after about 45 minutes.

"I think you're going to remember today," he said toward the end, predicting that the public might look back on his economic policies and conclude he was right. That's despite many experts predicting his policies will mean major upheaval for the U.S. economy.

Trump is calling his tariff policy "kind reciprocal," saying he could've been much harsher on U.S. trading partners.

The president said the tariff rates he's imposing, steep as they are, don't match the levies that some countries impose on U.S. exporters. He's calling the rates he chose the "discounted reciprocal tariff."

Trump used his tariff speech to again champion the Gilded Age.

As he has repeatedly since starting his second term, Trump suggested that the U.S. was at its wealthiest when it was a "tariff nation" between 1870 and 1913.

He added that "for reasons unknown to mankind," the U.S. went to income tax in 1913.

Trump suggested that the 1930s' Great Depression was fueled by the U.S. going to an income tax and away from tariffs.

Economists and historians say the U.S. did grow between 1870 and 1913, but that was mostly due to immigration and was wracked by inequality.

This is the full list of what Trump is calling "reciprocal" tariffs:

1. China: 34%

2. European Union: 20%

3. South Korea: 25%

4. India: 26%

5. Vietnam: 46%

6. Taiwan: 32%

7. Japan: 24%

8. Thailand: 36%

9. Switzerland: 31%

10. Indonesia: 32%

11. Malaysia: 24%

12. Cambodia: 49%

13. United Kingdom: 10%

14. South Africa: 30%

15. Brazil: 10%

16. Bangladesh: 37%

17. Singapore: 10%

18. Israel: 17%

19. Philippines: 17%

20. Chile: 10%

21. Australia: 10%

22. Pakistan: 29%

23. Turkey: 10%

24. Sri Lanka: 44%

25. Colombia: 10%

"It's our declaration of economic independence," Trump said in announcing a barrage of tariffs. "For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it's our turn to prosper."

U.S. financial markets have been unsettled in anticipation of Trump's tariff announcement. Trump insists the moves will strengthen the U.S. economy, even as many experts worry it could lead to higher prices for most American consumers.

The S&P 500 was virtually unchanged in late trading Wednesday, but only after careening between an earlier loss of 1.1% and a later gain of 1.1%. It's had a pattern this week of opening with sharp drops only to finish the day higher.

The Dow Jones Industrial Average was up 31 points, or 0.1%, with an hour remaining in trading, and the Nasdaq composite was 0.3% higher. Both also veered from sharply lower in the morning to sharply higher in the afternoon and then doubled back.

Elon Musk's Tesla helped knock the market around after initially falling more than 6% following a report that it delivered fewer electric vehicles in the first three months of the year than it did in last year's first quarter.