​It is no April Fool's joke - just days into the month, President Donald Trump has launched a significant shift in U.S. trade policy. On April 2, 2025, he declared a “national emergency” over foreign trade practices, allowing him to use special powers to introduce broad new tariffs on imported goods. This move fulfills a key campaign promise and has sent governments and markets worldwide scrambling to assess the impact. ​

Trump’s order introduced a 10% baseline tariff on all imported goods into the United States​. On top of that, dozens of countries with large trade imbalances with the U.S. were slapped with higher “reciprocal” rates, some of the steepest in modern history. China, the largest source of U.S. imports, was hit with an additional 34% tariff​ (bringing total duties on Chinese goods to roughly 54%). The European Union faces a 20% tariff​ on its exports to the U.S. Other major trading partners were not spared: Vietnam is looking at 46%, Taiwan 32%, India 26%, South Korea 25%, and Japan 24% tariffs on goods bound for America​. In total, the tariffs range from 10% to as high as 50%, casting a wide net that left almost no U.S. ally or adversary untouched​. Notably, neighbors Canada and Mexico were exempted from new targeted tariffs under separate agreements, although they remain subject to the 10% baseline tariff and certain existing duties​.

These tariffs represent the highest U.S. trade barriers in nearly a century, with analysts noting this raises the tallest tariff wall since 1933​. The White House argues these measures are long overdue to force fair play. Officials cited persistent U.S. trade deficits and “unfair practices” like other countries’ higher import taxes and subsidies, which they say have hollowed out American industry​. “Treat us like we treat you,” Trump demanded, describing the policy as simply enforcing reciprocity​. Certain strategic goods are exempt from the new tariffs (for example, crude oil, critical minerals, pharmaceuticals and some metals) to avoid supply shocks​. But for most products and countries, the era of low tariffs abruptly ended on April 5, when the baseline 10% duty took effect ​(higher country-specific rates kick in on April 9).

Figure 1: Targeted Economies. A heatmap of the new U.S. tariff rates imposed on imports by country (darker red = higher tariff rate). Many nations now face double-digit duties, with a handful seeing rates above 40%. Source: Atlantic Council

Understanding the true bite of these tariffs requires going beyond percentages. This bubble graph from the Overseas Development Institute (ODI) compares the new U.S. tariff rates with each country’s export reliance on the U.S. market, a crucial measure of exposure. Countries like Vietnam, Cambodia, and Sri Lanka face high new tariffs and depend on the U.S. for over a quarter of their exports, making them especially vulnerable.

Figure 2: Exposure of countries by the new tariff applied. Source: ODI Analysis

Here, bubble size reflects the total volume of exports each country sends to the U.S., while positioning shows how hard they’re hit. For instance, China appears as a large bubble with moderate reliance but high tariffs; Vietnam shows both high exposure and steep duties. Meanwhile, countries like Saudi Arabia and the UK, though subject to tariffs, are less exposed due to lower trade dependency.

This visual makes it clear that the impact of tariffs is not evenly distributed - it is a mix of how high the tariff is and how dependent a country is on the U.S. market.

The tariff announcement reverberated worldwide. Stock markets plunged as investors feared a spiraling trade war: Wall Street had its worst day since 2020, with the S&P 500 sinking almost 5%​, and Japan’s Nikkei index tumbled to its lowest in years. A major investment bank now pegs the chance of a global recession at 60%, up from 40% before, given the broad reach of these measures​. “The global economy is fundamentally different today than it was yesterday,” remarked Canadian Prime Minister (and former central banker) Mark Carney, as Canada announced countermeasures in response​. The head of the IMF, Kristalina Georgieva, warned the tariffs represent a significant risk to the global outlook and urged dialogue to reduce uncertainty​.

Trade partners are hitting back. Within two days, China, calling the U.S. move “trade bullying”, retaliated with additional 34% tariffs on all U.S. goods and even curbs on exports of rare earth minerals crucial to American industries​. Beijing also closed a loophole that had allowed cheap Chinese e-commerce parcels into the U.S. duty-free​. In Europe, leaders decried Washington’s actions. French President Emmanuel Macron urged EU countries to suspend investment in the U.S. and Brussels prepared its own tariff reprisals on iconic American products (from motorcycles to peanut butter) should negotiations fail​. Even close allies were stunned; Japan’s prime minister called the situation a “national crisis” for his export-dependent nation​. Still, several U.S. partners (Japan, South Korea, India and others) signaled they would hold off on immediate retaliation​, attempting talks with Washington to ease the barriers. Britain, for instance, rushed to seek a special trade deal to shield its exporters​.

On the U.S. side, businesses are already adjusting supply chains. American consumers and companies should expect higher costs on countless products, from everyday items to big-ticket electronics. Analysts note that everything from running shoes to musical instruments, like violins, could see price hikes under the tariffs. One eye-catching projection: a top-of-the-line iPhone, which due to reliance on Chinese parts, might cost nearly $2,300 in the U.S. after these import taxes are applied​. Automakers that depend on global parts moved quickly; Stellantis announced temporary layoffs and even idled some factories in Canada/Mexico in response to the tariffs, while General Motors said it will ramp up production within the U.S. to reduce import exposure​.

Here in the Gulf, the reaction is cautious. Gulf Cooperation Council (GCC) countries will face the same 10% U.S. import tariff as other nations​. In other words, goods exported from the UAE to the United States now generally incur a 10% duty (though energy exports like crude oil are explicitly exempt to prevent disruptions​). This means the region avoided the harshest tariffs; U.S. officials noted the UAE and Saudi Arabia have relatively moderate trade imbalances and already charge around 5-10% on U.S. imports, making a 10% U.S. tariff “reciprocal”. Direct trade flows between the Gulf and U.S. are not large in volume (and key oil sales won’t be taxed), so the immediate impact is limited. In fact, some analysts suggest Gulf exporters could even become slightly more competitive in the U.S. market relative to heavily tariffed rivals like China or Europe​.

The bigger worry for the Middle East is indirect. A global trade war threatens to slow growth in major economies, which in turn hurts demand for oil and petrochemicals, the lifeblood of Gulf economies. In the days after Trump’s announcement, oil prices slumped on recession fears (benchmark Brent crude briefly fell below $75 a barrel​, marking its worst week in months)​. Lower oil revenues pose a challenge for Gulf states’ budgets. (For instance, Saudi Arabia reportedly needs oil near $90+ to balance its budget, so prolonged low prices could widen deficits​.) The UAE, with a more diversified economy and an estimated fiscal breakeven around the mid-$50s per barrel​, is better cushioned but still sensitive to global swings in energy demand.

Beyond oil, local businesses and consumers could feel ripple effects. Many consumer products in the Gulf (from smartphones and laptops to cars and machinery) are imported, either from the U.S. or through global supply chains. If Trump’s tariffs drive up costs for, say, American or Chinese manufacturers, Gulf importers might see higher prices down the line​. Senior Gulf market analyst Hamza Dweik noted that non-energy sectors like electronics, autos, construction materials, and retail goods are most vulnerable, since they rely on global imports​. For example, if the cost of U.S.-made equipment or Chinese electronics rises due to tariffs, companies in the UAE may have to pay more to stock those items, potentially passing costs to consumers.

For students at NYU Abu Dhabi, this global trade upheaval hits close to home. The UAE’s open economy means events in Washington or Beijing can influence opportunities and prices in Abu Dhabi. Business and economics students can witness real-time how trade policy shifts affect world markets and local livelihoods, from the price of an iPhone on store shelves to the hiring plans of energy firms. Engineering and science students interested in renewable energy or electric vehicles may note how tariffs on batteries and tech components ripple through the supply chain.

But there’s more: with NYUAD’s strong global network and study away options in New York, Shanghai, London, EU and more, students spending a semester abroad may feel the effects in subtle but real ways. In New York, tariffs may translate into higher prices for imported electronics, fashion and groceries, all of which could affect student budgeting. In Shanghai, the trade war has sparked retaliatory tariffs and tighter tech restrictions, which could limit access to U.S. content platforms, applications, or tech tools often used for coursework. In EU locations, certain American goods (from consumer electronics to cosmetics) may become more expensive or harder to find due to EU-U.S. trade friction.

Students pursuing internships abroad should also be mindful of the broader economic uncertainty triggered by global trade tensions. Industries like automotive, logistics, energy, and tech (all major employers in NYU sites) are re-evaluating supply chains and spending. It is a timely reminder for students to track local developments, understand how macroeconomic shifts shape everyday realities and be prepared to adapt financially and professionally during their study away.