President Donald Trump’s unprecedented tariffs on global imports into the United States take effect Wednesday, reshuffling a global economic order that has largely stood for generations. 

The mere announcement of the duties last week sent shock waves through global markets and caused trillions of dollars in paper losses. Now, consumers and investors alike will begin to gauge the actual impact on the U.S. economy as the cost of the import taxes starts to flow through supply chains and into businesses and household budgets.

The average tariff faced by the dozens of nations Trump targeted is 29%, with many as high as 40%. The White House posted the full list here. Chinese imports will carry a cumulative rate of 104% because of new tariffs Trump imposed this year, on top of levies he had already enacted during his first term. Those took effect late Tuesday. 

Trump is seeking to reshape the global world economic order by reducing America’s reliance on foreign imports. Amid debate about how the country-by-country tariffs were calculated, Trump has acknowledged that his goal all along was to effectively erase or even reverse the U.S. trade deficit, which most economists say serves little purpose and is likely to lead to higher prices and potentially slower economic growth.

Already, Trump has instituted a 10% baseline tariff on goods brought into the United States. And while he said he would negotiate over trade, he gave little sign of relenting, only posting a note in the morning that he believed China would seek a deal alongside other potential agreements his administration is discussing with Japan, South Korea and other countries.  

Tariffs are nothing new, and many business leaders have long argued that the United States must do more to prevent some low-cost goods, especially from China, from flooding its markets. 

But Trump shocked the world with his attempt to bring to the United States the production of a vast array of goods that are, in most cases, produced more affordably overseas. 

“It’s too much too fast,” said Craig Fuller, founder and CEO of FreightWaves, a logistics consultancy. Businesses — especially small ones — are simply not equipped to alter their supply chains at the speed and scale Trump desires, he added, and will face enormous cost increases in the meantime while they try to reckon with them.  

“It’s not realistic,” Fuller said. 

Trump has shown little appetite for taking “no” for an answer, even as financial markets plunged.

On Monday, he told reporters at the White House that “I don’t mind going through it because I see a beautiful picture at the end,” because “tariffs will make this country very rich.”

Economists are not as sanguine about the tariff program. Many are sounding alarms about what could be next. In a note to clients ahead of Wednesday’s deadline, analysts with Wells Fargo said the tariffs would be likely to cause a “modest” stagflationary “shock” to the U.S. economy: As prices go up, they will contribute to eroding real income growth, causing spending and overall economic activity to contract, they said.

And if other countries retaliate with tariffs that are equivalent to the levies the United States has already slapped on them, they wrote, “then the contraction in real GDP is even deeper.” 

“The downturn in the economy causes the unemployment rate to rise from its current level of roughly 4% to about 5%,” they wrote.

That 5% unemployment figure echoes similar projections last week from analysts with JPMorgan, who said “the pinch from higher prices that we expect in the coming months may hit harder than in the post-pandemic inflation spike,” given that income growth was already slowing. 

“Moreover, in an environment of heightened uncertainty, consumers may be reluctant to dip too far into savings to finance spending growth.”

Several countries are already retaliating. With the tariffs’ taking effect Wednesday, Canada said it was instituting 25% duties on some U.S.-made automobiles and all U.S.-made auto parts. 

“President Trump caused this trade crisis — and Canada is responding with purpose and with force,” Canadian Prime Minister Mark Carney wrote Tuesday on X.

China has already hit back with 34% tariffs on American products — mostly energy and agricultural products — prompting Trump to say new duties on Chinese goods would go into effect Wednesday. China is also considering a ban on U.S. cultural exports like movies. 

Perhaps most worrisome is that lower borrowing rates Trump sought to better grapple with his budget plans have not materialized. Late Tuesday, the yield, or interest rate, that investors demand to lend money to the government had surged back above the level it had hit before Trump’s tariffs rollout last week.

For all the massive moves in financial markets that have already taken place, one expert says it may only be the beginning. 

“A historical shift in trade policy … will not be digested that quickly,” Jens Nordvig, founder and CEO of Exante Data financial consultancy, wrote late Tuesday on X. “It could take weeks and months and even quarters, before we have their full effects embedded. “