In President Donald Trump’s original trade war, it mattered who your friends were. Not this time.

Trump on Wednesday unleashed a tariff bonanza that goes far beyond the reach of his first-term levies and hit everyone: friend and foe, across all sectors, with few exemptions.

Trump imposed across-the-board 10% tariffs and went beyond that for China and other countries, with charges based heavily on other nation’s trade surpluses with the US. He also again signaled forthcoming duties on sectors like pharmaceutical drugs, semiconductor chips, lumber and copper.

The moves, combined with Trump’s previous import taxes on autos, Canada, Mexico and China, will push the average effective US tariff rate to 23%, from 2.3% in 2024, according to Bloomberg Economics. That’s more than the 1930 Smoot-Hawley tariffs that many economists say worsened the Great Depression, and the highest average US tariff rate in more than a century.

Israel, one of the US president’s closest allies, announced Tuesday it had pulled down all duties on US products, only to be hit the next day with 17% levies. The White House even highlighted new tariffs on the Heard and McDonald Islands, an uninhabited archipelago near Antarctica that serves as a breeding habitat for penguins.

There were elements of leniency, with Trump exempting already-tariffed products such as steel and aluminum from the additional reciprocal rates. Canada and Mexico also were spared from the fresh salvo, though they had already been hit with tariffs of up to 25%.

Yet the announcement satisfied Trump’s longstanding desire to exact revenge on key trading rivals and partners alike, particularly those who run trade surpluses with the US, and signaled that his desire to carve out and exclude certain sectors had all but disappeared.

“In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,” Trump said Wednesday. “We have to take care of our people, and we’re going to take care of our people first, and I’m sorry to say that.”

Stocks plunged and haven assets rallied as investors fled for safety after Trump’s sweeping tariff announcement renewed fears they could stoke inflation and stymie growth. S&P 500 Index futures sank over 3.5% Wednesday evening New York time, while contracts on the Nasdaq 100 slid 4.5%.

Despite its historic scope, Trump’s announcement was in some ways pared down from previously considered options.

Aides discussed a 20% global tariff and had not indicated whether Trump’s new levies would stack on to other existing tariffs. Under that scenario, for instance, a Mexican steelmaker could have faced as many as three Trump duties.

Factors like military alliances and trade surpluses weren’t enough to deter Trump from exempting nations from his 10% minimum duty. Senior administration officials, who briefed reporters ahead of the announcement, said a tariff floor was necessary to prevent exporters from skirting US levies using transshipments through third countries.

Partners such as the UK and Australia, the latter of which runs a trade deficit with the US, were tariffed at 10%, while Japan was hit with a 24% rate. Trump also did stack some tariffs — the new 34% tariff on China, for instance, adds to existing levies, including a 20% charge he had already imposed this term.

“We’re being nicer than they were,” Trump told reporters Monday. “I always say friend and foe. But the friend in many cases is worse than the foe.”

The tone marks a contrast from Trump’s first term, when his administration offered a litany of carve-outs and exemptions to friendly nations on steel and aluminum tariffs and eventually resolved trade complaints about Canada and Mexico with a revised North American trade deal.

Yet the unforgiving nature of Trump’s tariff push in his second term is becoming an emerging pattern.

Hyundai Motor Co. announced billions in US investment only to see Trump hit auto imports with tariffs that disproportionately hit the South Korean automaker, as well as a 26% duty on Seoul. Apple Inc.’s $500 billion US investment pledge, which Trump loves to tout, didn’t stop high tariffs aimed at China and nearby Asian nations that are low-cost manufacturers.

The move triggered major backlash from business groups and garnered little buy-in from Trump’s fellow Republicans.

“What we’ve seen today represents a watershed moment in American trade policy that poses severe downside risks to the global economy,” International Chamber of Commerce Secretary General John W.H. Denton said in a written statement.

Josh Bolten, CEO of the US-based Business Roundtable, said the tariffs “run the risk of causing major harm to American manufacturers, workers, families and exporters” and called on the administration to quickly strike deals to lift them.

Trump’s former vice president, Mike Pence, derided it as the “Trump tariff tax.”

The US president did bow to the overtures of some stakeholders. His Canada and Mexico exemptions from the new duties — and pledge to exempt USMCA goods if the countries are ever shifted to those new duties from their current ones — averted a scenario that would have broken the North American supply chain.

Recession Risk

Still, the aggressive moves outpaced Wall Street’s expectations and fueled talk of a greater recession risk.

“This basically gets us to our worst case scenario,” said Diane Swonk, chief economist at KPMG. “The issue obviously going forward is, there’s obviously room for negotiation here, but what we don’t know is what retaliation will look like.”

Economic chaos could strain Republican unity as lawmakers push to strike a deal to extend Trump’s first-term tax cuts and add new ones, like his call to not tax tipped income.

Four Senate Republicans bucked the president Wednesday to vote with Democrats in opposition to his tariffs on Canada, though that measure is unlikely to change Trump’s tariff trajectory and fell far short of the support needed to override a promised Trump veto, were it to get that far. Still, with narrow margins in the House and Senate, Trump and GOP leaders will need near unanimity in the months ahead to advance the rest of his legislative agenda.

Trump’s administration has been gripped in internal talks for months on the scope of his tariff plans, which have already changed heavily.

Trump wanted a flat global tariff before pivoting to the notion of “reciprocal” tariffs, partly as a branding exercise based around the idea of fairness. He teed up, delayed, enacted, then clawed back the tariffs on Canada and Mexico, all while adding 20% levies on China. His advisers have made clear there are ongoing talks over the permanent scope of the plan.

The frenzied nature of the announcement played out Wednesday with Trump producing a large placard at his press conference as the first public indication of the tariff rates. Trump’s team assigned numbers to each country, without saying how it reached them, and then charged half that rate, with Trump casting that as an act of benevolence. The US Trade Representative’s office later said that existing trade balances, not tariffs on American goods, were a primary factor.

Confusion about Trump’s tariffs have helped drive down US consumer confidence, and with it Trump’s approval ratings on the economy. Wednesday’s rollout, billed as one of the signature moments of his presidency, did little to provide clarity about his future plans.

“The uncertainty that has damped consumer and corporate confidence has not been eradicated. What detail there is looks ad-hoc and bereft of any comprehensive strategy,” said Joseph Brusuelas, chief economist at RSM US LLP.