Trump's New 2025 Tariff Policy Sparks Global Economic Shockwaves: U.S. Hoarding Surge, Asian Exports Suffer, Wall Street Stock Market Plummets

On April 9, 2025, U.S. President Donald Trump initiated the "Reciprocal Tariff" policy, which imposed tariffs ranging from 20% to 50% on 60 countries, including Taiwan, Vietnam, China, and the EU, which caused global market turmoil. American consumers started stockpiling goods, Asian exporting countries suffered significant impacts, and Wall Street experienced a significant downturn. Former U.S. Treasury Secretary Lawrence Summers warned that this policy might lead to an economic recession and urged for its withdrawal. Vietnam proposed allowing duty-free imports of American goods to alleviate the situation.

Content and Implementation of Tariff Policy

On April 2, the Trump administration announced a "reciprocal tariff" policy to be applied to 185 countries worldwide, imposing tariffs based on the actual tariffs and non-tariff barriers these countries impose on American goods. Starting April 5, all imported goods will be subject to a preliminary 10% base tariff; higher rates will be applied to specific countries starting April 9.

Taiwan is on the high tariff list, with exports to the U.S. facing a 32% tariff, covering high-tech industries such as semiconductors, information and communication technology, and precision machinery. Vietnam will be subject to a 46% tariff, China 34%, the EU 20%, South Korea 26%, and Japan 24%. The U.S. Trade Representative (USTR) pointed out that these countries impose unequal trade barriers on U.S. goods, including technical standards, agricultural import restrictions, and currency manipulation.

U.S. Consumer Behavior: Hoarding Resurfaces

In response to the impending high tariffs, U.S. consumers are exhibiting noticeable hoarding behavior. According to a Reuters report, many people are bulk-buying canned goods, flour, olive oil, toilet paper, and electronics at Walmart and Costco. Manish Kapoor, founder of supply chain management company GCG, noted that this wave of hoarding is reminiscent of the panic buying at the onset of the COVID-19 pandemic, reflecting concerns about rising prices and supply disruptions.

The non-profit research organization Tax Foundation estimates that these new tariffs will result in a total loss of $3.1 trillion for U.S. households over the next decade, with an average increase of $2,100 in living costs per household by 2025.

Impact on Asian Exporters: Taiwan and Vietnam Hit First

As the sixth-largest source of trade surplus for the U.S., Taiwan's trade surplus with the U.S. reached $73.9 billion in 2024, making it a key target of this tariff policy. According to the Ministry of Economic Affairs, industries with a high export ratio to the U.S., such as semiconductors, laptops, and network equipment, will face severe impacts. Brands like HP, DELL, Acer, and ASUS have already notified their supply chains to halt shipments for two weeks, awaiting the U.S. policy direction.

In Vietnam, after a phone call with Trump, Prime Minister Pham Minh Chinh proposed reducing import tariffs on U.S. goods to zero and pledged to purchase more U.S. defense and aviation products. However, Trump's trade advisor Navarro emphasized that the issue lies not with the tariffs themselves but with Vietnam's "non-tariff barriers" practices, including currency manipulation and false country-of-origin labeling. Vietnam's benchmark stock index has dropped nearly 14% since the policy announcement.

Wall Street Stock Market Volatility

Trump's tariff policy has led to consecutive declines in the U.S. stock market. The S&P 500 index closed at 4,982 points on April 8, hitting a new low since April 2024. The Philadelphia Semiconductor Index (SOX) plunged 16.74%, reflecting market pessimism about the export prospects of the tech industry. The Dow Jones index lost over $6 trillion in market value within two days.

Market analysts point out that stock market volatility is highly correlated with tariff news. Whenever there are reports of possible tariff delays or negotiation progress, the stock market temporarily rebounds; conversely, when policy implementation news is released, the market plummets. The 10-year U.S. Treasury yield has also risen due to increased demand for safe-haven assets, indicating investor concerns about the economic outlook.

Summers Warns: Increased Risk of Economic Recession

Former U.S. Treasury Secretary and Harvard University professor Lawrence Summers stated in a Bloomberg TV interview that Trump's tariff policy could lead to a U.S. economic recession, potentially resulting in up to 2 million job losses and an average loss of over $5,000 per household. He noted that the scale of these tariff measures even exceeds the Smoot-Hawley Tariff Act during the Great Depression of 1930.

Summers emphasized that the market has sent clear warning signals, and if the policy is not immediately withdrawn, the stock market could further decline. He believes this is the first time in U.S. history that an economic recession is triggered by its own policy and urged business and academic leaders to express their concerns publicly.

International Reactions and Negotiation Dynamics

The trade ministers of the 27 EU countries have held an emergency meeting, deciding to prioritize negotiations with the U.S. to prevent an escalation of the trade war. China has announced retaliatory tariffs of 34% on U.S. goods starting April 10. In Taiwan, President Lai Ching-te stated that no retaliatory measures would be taken and instructed the Executive Yuan to engage in strong negotiations with the U.S. to seek tariff reductions or exemptions.

The U.S. Department of Commerce stated that products containing more than 20% U.S. value could apply for exemptions, providing some buffer for certain businesses. However, practical implementation awaits updates to the U.S. customs system and clear guidelines.

Trump's New 2025 Tariff Policy Sparks Global Economic Shockwaves: U.S. Hoarding Surge, Asian Exports Suffer, Wall Street Stock Market Plummets

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