Trump’s “Liberation Day” rates were worse than expected: it was a global wear

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Good morning. Friend or enemy? Yesterday it almost did not matter, as Donald Trump deployed cheap goals against all United States commercial members. Knowledge headlines numbers: an initial rate of 10% to all imports, with specific and higher rates in some countries, including 34% in China (in addition to the existing 20% ​​rates), 20% in the EU and up to 46% and 49% in Vietnam and Cambodia respectively. “We do it, we do it to them,” the President said during Rose Garden. Some foods to think as the fall begins:

It’s worse than expected. As was the white house The details of ironing From the Plan on Tuesday, the markets showed some signs of life, as the investors were waiting for the last minute mercy. But the future of the actions were dived after Wednesday’s announcement. According to the United States, only half of what is bought by the north -Americans in America Data from the Department of Commerceand industries such as the car sector that have complex world supply chains.

This diminishes China’s strategy+1 of manufacturers. Some Asian countries have a particularly strong success rates of 40% or moreFaced once by the push of American manufacturers to diversify production beyond China to low-cost neighbors such as Vietnam, Bangladesh and Cambodia, especially in areas such as textiles and electronics. Gap Inc. – man to gap, AthleteBanana Republic and Old Navy: has reduced its exposure to China in recent years but still Fonca the vast majority of their clothes Of Asian countries led by new rates. Change takes time.

A global reaction could harm all companies. Trump described yesterday’s rates as “Friendly” for America’s commercial partners. Of the anger of Foreign leaders For foreign consumers by boycotting -we are clear that our partners disagree. Hostility is bad for business, with Ey, Goldman Sachs and Moodys economists Predict lower growth of auto-inflicted fare wounds. I spoke this week with Niccolo de Masi, CEO of the Ionq Quantum Computer Company. “We are building all our things in America,” he said. “We are not adversely affected by the rates, but we are realistic that our ability to succeed in Asia and Europe has more presence.” It is harder to do -if a trade war low nationalist instincts.

This could devastate economies and highly successful industries. Jacques Vandermeiren, the CEO of the port of Antwerp-Bruges, the second largest port in Europe, told my partner Peter Vanham In early autumn, “if Trump launches up to 10 percent, we will treat.” Substantially higher than this, Vandermeiren warned, could cause disasters for the steel, aluminum, automobiles and other industries in Europe. The Switzerland Watches Industry, which exports more of its products to the United States than any other countryIt will now face a strong rate of 31%. Those who want a Rolex or Patek Philippe will settle for a substitute? I doubt it.

There will be a lot of negotiation in the coming days, and business leaders know from experience that what appears on paper in a press conference may not translate to action on the border, or can be quickly reversed. And American consumers, the expense of which represents more than two thirds of GDP, do not seem so excited by all these rates that they are told to help them at the end. Consumer feeling tracked by Michigan University It has been in a trend this year to the lowest level from 2022.

Adam Smith once wrote that the nations rarely prosper beggar to their neighbors. It was in 1776, when the mercantilism was dying and the United States was born. Released from the British government, the young nation used tariffs to develop homemade industries that later competed in the world stage. With one of us, connected worldwide that returns to the last rate levels seen for the early 1900’s, as cars had just come to the scene, the impact could be very different.

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Contact CEO daily through Diane Brady at Diane.brady@fortune.com

This story originally presented to Fortune.com