The Global Retaliation Against U.S. Tariffs is Expected to Take Place This Week

Approximately $11.1 trillion (, equivalent to 37% of the GDP of the United States ), has been wiped out from the U.S. stock market in just 44 trading days due to Trump’s tariff instability. Since the White House announced a comprehensive tariff plan that sent investors scrambling for cover, global retaliation from over 150 countries is expected to take place this week. On April 5th, the 10% base tax for all countries came into effect. Then on Sunday, U.S. Commerce Secretary Howard Lutnick stated, “There will be no tariff delays.” The reciprocal tariffs will take effect at 12:01 AM Eastern Time on April 9th, and hopes for a postponement have gradually faded, increasing concerns about global retaliation. According to a post by Kobeissi Letter on X, Goldman Sachs predicts that the tariffs will increase by 18.8% following the announcement of the ‘Liberation Day’ on April 2nd.

Meanwhile, President Trump has said very little about any new trade negotiations that may take place. The only hints have come from Taiwan, Vietnam, Zimbabwe, and India, where officials have indicated they may negotiate for better terms. Taiwan’s President Lai Ching-te has proposed a zero tax rate when removing trade barriers and committed to increasing investment in the United States. Similarly, Zimbabwe’s President Emmerson Mnangagwa also suggested suspending taxes on U.S. goods in an immediate response.

Market Followers Predict “Reciprocal Tariffs on Reciprocal Tariffs” Last week, China imposed a 34% tariff on goods from the United States, including $140 billion worth of exports. Traders view this bold move as the first step in a larger trade war. Meanwhile, the decline in the stock market, along with falling oil prices and Treasury bond yields, strongly hints at an impending recession.

Meanwhile, Treasury Secretary Bessent urged trade partners not to retaliate. He stated that the United States would raise taxes if countries responded with further retaliatory measures. However, last week the European Union stated that they were preparing countermeasures against Trump’s tariffs. The EU shipped $606 billion worth of goods to the United States in 2024, with a trade deficit of about $236 billion. Therefore, many analysts believe that the EU’s response will be a significant driver for the market.

Reuters reported on March 31 that China, Japan, and South Korea will respond together to the tariffs. China has acted, but Japan and South Korea remain relatively silent. A joint move from these three countries could affect about $280 billion worth of U.S. imports. The President of Mexico declared that his government would provide a “comprehensive response.” Canada also announced it would react to this escalation. Unlike other countries, both Canada and Mexico are not subject to the 10% base tax, although previous tax levels for these two countries still apply. The past four days have felt like the calm before a potential storm. Most countries have remained silent after what is called Trump’s “Day of Liberation.” This means that these countries are either trying to negotiate or are preparing countermeasures.

With tariffs affecting 185 countries, the market is preparing for a global trade war, leading to significant volatility. On Friday, the total volume of options surged above 100 million contracts in just one day for the first time, according to ZeroHedge. At the same time, the volatility index (VIX) spiked 110 points last week, although it remains 20 points below the peak on August 5.