The latest round of U.S. trade tariffs will hit the global economy, which has barely recovered from the post-pandemic spike in inflation, is weighed down by record debt, and is caught up in geopolitical conflicts.

Depending on how Donald Trump and the leaders of other nations now proceed, it may also go down as a turning point for a globalized system that has hitherto taken for granted the power and credibility of America, its largest component.

“Trump’s tariffs risk destroying the global free-trade order that the United States itself pioneered after World War II,” said Takahidei Kyuchi, of the Nomura Research Institute.

But in the coming months, the simple and clear effects of the increasing prices – and thus reducing demand – of new levies applied to thousands of goods bought and sold by consumers and businesses around the globe will prevail.

“I see this as a drift of the US and global economy towards worse performance, more uncertainty and possibly heading towards what we could call a global recession,” said Antonio Fata, of INSEAD.

Trump said he would impose a basic 10% tariff on all imports and presented a chart showing higher tariffs on some of the country’s biggest trading partners, including 34% on China and 20% on the European Union. Earlier it had confirmed a 25% tariff on cars and auto parts. Trump claimed the tariffs would return strategically vital manufacturing capabilities to the United States.

Under Trump’s new global levies, the US tariff rate on all imports jumped to 22% – a rate last seen around 1910 – from just 2.5% in 2024, said Fitch Ratings’ Olu Sonola.

“This is a game changer, not just for the U.S. economy but for the global economy,” he said. “Many countries will probably end up in recession.”