Kathmandu: U.S. President Donald Trump has ordered a sweeping increase in tariffs on goods from dozens of trading partners, a move the White House says is intended to stimulate domestic manufacturing and support American exporters. The new policy, announced on Thursday, will come into effect within a week, leaving room for last-minute negotiations.

According to the White House, the executive order raises the reciprocal tax rate—initially set at 10% in April—to as high as 41% for around 70 countries. The revised tariff rates vary by country, with Switzerland facing a 39% tariff and Thailand 19%.

A Strategy for Economic Boost or Inflation Risk?
President Trump has defended the move as part of his effort to reshape global trade, reduce dependency on imports, and revive domestic industries. However, economists warn that the policy could lead to higher inflation and broader economic uncertainty in the world’s largest economy. The tariffs also cast doubt on the viability of bilateral trade agreements, particularly with key allies such as the European Union and Japan.

Targeting Canada, Avoiding China… for Now
One of the most notable targets of the tariff hike is Canada, which now faces a 35% increase in duties on its exports to the U.S. Tensions between the two countries have risen, particularly after Canadian Prime Minister Mark Carney’s announcement in September recognizing a Palestinian state—a move that reportedly angered U.S. officials. Despite the tariffs, Trump has suggested that further negotiations with Canada remain possible.

Surprisingly, China has been excluded from the new tariffs. Both countries are currently engaged in negotiations following previous rounds of punitive trade measures. A truce is in place, but with an August 12 deadline approaching, the threat of reinstated tariffs looms if no agreement is reached.

Legal Hurdles and Market Uncertainty
Trump's decision has also sparked legal challenges. A lower court previously ruled that the administration had overstepped its authority, and the case is now under review by the U.S. Court of Appeals for the Fifth Circuit. The outcome could determine the long-term legality of the tariff program.

While Trump's supporters argue that the tariffs are a necessary measure to protect American industry, critics—including many economists—warn of potential market instability and rising consumer costs. The full impact of the policy, they say, will only become clear with time and further data.

Global Trade Rules in Question
Wendy Cutler, senior vice president at the Asia Society Policy Institute, criticized the move as a major blow to the post-WWII global trade order. “This action has dismantled decades-old international trade rules,” she said, warning that the burden may now fall on U.S. allies and other trading partners to uphold multilateral norms in the absence of American leadership.

As countries respond to the U.S. tariffs, global trade dynamics face a period of significant realignment and uncertainty.