Elon Musk said on Saturday that he hoped that Europe and the United States would agree to a “zero-tariff situation” which would create a de facto free-trade zone spanning the Atlantic Ocean.

“I hope it is agreed that both Europe and the United States should move ideally, in my view, to a zero-tariff situation, effectively creating a free-trade zone between Europe and North America,” the billionaire adviser to US President Donald Trump told Italian nationalist Deputy Prime Minister Matteo Salvini.

Standing on the White House lawn on Wednesday, Trump unveiled a baseline 10% tariff against almost all US trading partners in the world from April 5, and an additional top-up rate from April 9 for other countries currently imposing tariff and non-tariff barriers against US companies.

Trump’s decision to slap a 10% tariff on most goods imported to the United States, as well as higher duties on dozens of countries from rivals to allies, has intensified a global trade war that threatens to stoke inflation and stall growth.

The sweeping duties immediately unleashed turbulence across world markets and drew condemnation from other leaders now faced with the end of decades of trade liberalisation that have shaped the global order.

US Treasury chief Scott Bessent urged other nations not to retaliate, moves that could lead to dramatically higher prices for consumers on everything from bicycles to wine. “If you retaliate, that’s how we get escalation,” Bessent told CNN.

Close US allies were not spared Trump’s ire, including the European Union, which faces a 20% tariff, and Japan, which is targeted for a 24% rate.

The effective US import tax rate has shot to 22% under Trump from just 2.5% in 2024, according to the head of US research at Fitch Ratings.

“That rate was last seen around 1910,” Olu Sonola said in a statement. “This is a game-changer, not only for the US economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”

The “reciprocal” tariffs, Trump said, were a response to duties and other non-tariff barriers put on US goods. He argued that the new levies will boost manufacturing jobs at home.

“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said.

Outside economists have warned that tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average US family by thousands of dollars.

European leaders reacted with dismay, saying a trade war would hurt consumers and benefit neither side.

“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favor of other global players,” Italy’s prime minister, Giorgia Meloni, said.