Trump rips up rulebook on trade and businesses are left reeling

US President Donald Trump is ripping up the rulebook on trade that has been in place for more than 50 years.

His latest round of sweeping tariffs, which came into force shortly after midnight on Wednesday, hits goods from some of America's biggest trading partners including China and the European Union with dramatic hikes in import duties.

The president and his allies say the measures are necessary to restore America's manufacturing base, which they view as essential to national security.

But it remains a potentially seismic action, affecting more than $2tn worth of imports, which will push the overall effective tariff rate in the US to the highest level in more than a century.

In the US, key consumer goods could see huge price rises, including an estimated 33% for clothing, and analysts are warning of near-certain global economic damage as sales in America drop, trade shrinks and production abroad falls.

With the stock market reeling and political pressure in the US starting to build, the White House has worked to soothe nerves by floating the possibility of trade talks, touting conversations that have already begun with Japan, Vietnam and South Korea.

But Trump has signalled resistance to the kinds of exemptions he granted during his first term, and even if these talks are ultimately productive, country-by-country deal-making will no doubt take time.