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The Trump administration on Wednesday issued an executive order imposing duties of at least 10 percent on imported goods from almost all of America’s trading partners starting Saturday — a sweeping plan that is in addition to a 25 percent tariff on foreign automobiles slated to take effect April 3, and previously announced increases on duties on goods from China, Mexico and Canada.
In announcing the new tariffs, President Trump said his goal is to revive U.S. manufacturing and generate “stronger competition and lower prices for consumers.”
At a press conference in the White House Rose Garden, Trump held up a chart showing counties deemed as the “worst offenders” that will be subject to higher “reciprocal” tariffs beginning April 9, including Vietnam (46 percent), China (34 percent), Taiwan (32 percent), Japan (24 percent) and the European Union (20 percent).
Trump’s chart purported to show “tariffs charged to the U.S.A.” and implied that countries charging those tariffs would be charged “reciprocal tariffs” roughly equal to half of the tariffs they charge on U.S. goods. According to the chart, Cambodia charges a 97 percent tariff on U.S. goods, and imports from Cambodia will therefore be subject to “reciprocal tariffs” of 49 percent.
But the fine print on the chart explains that “tariffs charged to the U.S.A.” by other nations includes “currency manipulation and trade barriers.”
“It’s … important to understand that the tariff rates that foreign countries are supposedly charging us are just made-up numbers,” journalist and author James Surowiecki noted on the social media platform X. Surowiecki believes the “tariff rates” the Trump administration claims are charged by foreign companies were arrived at by taking the U.S. trade deficit with each country and dividing that number by the country’s exports to the U.S.
In a “fact sheet,” the White House said the president has “declared that foreign trade and economic practices have created a national emergency, and his order imposes responsive tariffs to strengthen the international economic position of the United States and protect American workers.”
Economists have warned that the tariffs could mean higher prices for consumers, and bring about a recession if disrupt supply chains or lead to a trade war that dents U.S. exports.
Wednesday’s news did not panic investors, as Trump has been talking about tariffs for weeks and some think they’re a negotiating tactic. S&P 500 futures dropped by 2 percent after Trump’s press conference, with shares in many publicly-traded companies in the real estate and mortgage verticals including Anywhere Real Estate, Redfin, Zillow, Compass, CoStar Group and Rocket Companies posting similar declines in after-hours trading.
Pantheon Macroeconomics Chief U.S. Economist Samuel Tombs said the tariffs “were much bigger than most investors expected,” and will average 21 percentage points — assuming previously announced 25 percent tariffs on imports from Canada and Mexico go into effect April 2.
Trump did not discuss the status of those tariffs in his presentation, but Reuters reported that goods from Mexico and Canada that comply with the USMCA trade agreement will remain exempt, with the exception of automobiles, steel and aluminum.
Samuel Tombs
In a note to clients, Tombs said investors might not yet be panicking because the April 9 deadline for reciprocal tariffs “leaves the door open to back-tracking and further delay. The speed with which tariffs can be removed also bolsters the case for thinking that a slowdown, rather than a recession, lies ahead.”
The new tariffs won’t apply to oil and natural gas — news that was welcomed by the American Petroleum Institute.
“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,” API 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.”
Futures markets tracked by the CME FedWatch tool showed that investors think the additional tariffs haven’t raised the odds of a June Fed rate cut, but that the central bank is more likely to make several cuts by the end of the year to keep the economy from derailing.
Investors were pricing in a 70 percent chance of a June Fed rate cut after Trump’s press conference, down from 76 percent on Tuesday. But futures markets show investors now think there’s a 71 percent chance the Fed will cut rates three times this year, up from 71.3 percent on April 1 and 50 percent on March 26.
Fannie Mae forecasters said last week that they expected that tariffs previously implemented by the Trump administration would inflate prices and slow economic growth.
In their latest forecast, Fannie Mae economists said a slowdown in economic growth could give mortgage rates room to come down into the low sixes later this year. But that forecast did not include the new tariffs announced Wednesday by the Trump administration.
Mortgage rates expected to ease
Source: Fannie Mae and Mortgage Bankers Association forecasts, March 2025.
After hitting a 2024 low of 6.03 percent on Sept. 17, rates on 30-year fixed-rate conforming mortgages climbed to a 2025 high of 7.05 percent on Jan. 14. Rates on conforming loans retreated in February and then hovered in the mid-sixes for most of March, according to rate lock data tracked by Optimal Blue.
Homebuyers have responded to stable rates and rising inventories, and demand for purchase mortgages has been stronger than a year ago for more than two months, surveys of lenders by the Mortgage Bankers Association show.
The MBA’s latest Weekly Mortgage Applications Survey showed requests for purchase loans were up by a seasonally adjusted 2 percent last week when compared to the week before, and 9 percent from a year ago.
But annual inflation, as measured by the Federal Reserve’s preferred metric, the Personal Consumption Expenditures (PCE) price index, has been moving away from the Fed’s 2 percent target.
Inflation trending up again
Since falling to a 2024 low of 2.1 percent in September, the PCE index climbed to 2.6 percent in December following Trump’s reelection and stood at 2.5 percent in February, according to data released March 28.
Core PCE, which excludes volatile food and energy costs and can be a more reliable indicator of inflation, rose to 2.9 percent in December and 2.8 percent in February.
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