Trump's trade tariffs and threats

Since returning to office in January, Donald Trump has issued numerous tariff threats. These range from a duty on all imports to tariffs targeted at specific countries or sectors.

Trump's threats changed over time. This left other nations and business unclear as to what was next. It also created uncertainty for consumers and triggered a recent stock-market sell-off.

Here's a summary of Trump’s threats and actions in relation to trade.

BROAD TARIFFS

Trump's vision is based on a gradual rollout of tariffs that will apply to all U.S. imported goods.

Last month, Trump asked his team of economists to devise plans for reciprocal duties on all countries that tax U.S. imports. They also had to come up with ways to combat non-tariff barriers, such as vehicle safety regulations that exclude U.S. automobiles and value added taxes that raise their costs.

In the past, tariffs were the primary source of tax revenue in the United States. However, they have been reduced to a small fraction over the last few decades. Economists claim that Trump's policies are inflationary, as businesses who import goods and pay tariffs will pass on the costs to consumers.

The potential counter-tariffs imposed by global trading partners on U.S. agricultural and energy exports, as well as machinery and equipment, could escalate into a world trade war and create uncertainty for investors and businesses.

Specific COUNTRIES

Trump's tariff proposal targets several key trading partners.

MEXICO AND CANADA : Mexico and Canada were the two largest trading partners of the U.S. from 2024 to November. Trump's new tariffs of 25% on imports from Mexico, Canada and the European Union took effect on 4 March as a response to migration and fentanyl.

Tariffs were imposed on the majority of goods imported from Mexico and Canada. A 10% tax was also imposed on Canadian energy imports. Canada exports mainly crude oil, other energy products and cars and auto components within the North American automotive manufacturing chain. Mexico exports a variety of goods to the U.S., including industrial and automotive products.

Canada retaliated with 25% tariffs against US imports worth C$30 billion (US$20.7 billion), including orange juice and peanut butter. Other products include beer, coffee, motorcycles, appliances, and motorbikes.

The Canadian government said that it would add additional tariffs to C$125 billion worth of U.S. products if Trump's Tariffs remained in effect in 21 days. This could include vehicles, steel and aircraft, as well as beef and pork.

In his address to Congress on March 4, Trump said that further tariffs will be implemented by April 2, including "reciprocal duties" and non-tariff measures to address trade imbalances.

U.S. Commerce secretary Howard Lutnick stated that U.S. officials could still work out a partial solution with the two neighboring countries, and added that they need to do more in the fentanyl arena.

Trump retracted his planned tariffs of 50% on Canadian steel and aluminum after a Canadian official backed down from plans to impose a 25% surcharge for electricity exported to the United States.

Canada, which is the largest foreign supplier of aluminum and steel to the United States (C$29.8 Billion), announced on March 12 that it would impose retaliatory duties on U.S. imports worth C$29.8 Billion ($20 Billion) as a response to Trump’s steel and aluminium tariffs.

CHINA: Trump imposed 10% tariffs on all Chinese imports to the U.S. effective February 4, after repeatedly warning Beijing that it was not taking enough measures to stop the flow of illegal drugs into the United States.

Trump then added another 10% tariff on Chinese products, which took effect on March 4. This is on top of the 25% tariffs that were imposed during Trump's initial term on Chinese imports.

China announced additional tariffs between 10% and 15% on some U.S. Imports starting March 10, as well as a number of new export restrictions for certain U.S. Entities. It then complained to the World Trade Organization about the U.S. Tariffs.

China announced on March 12, that it will take all measures necessary to protect its rights and interest, following the increase in tariffs by U.S. president Donald Trump on U.S. imports of steel and aluminum.

Trump has said that the EU, and other countries, have alarming trade surpluses against the United States. He said that the products of the other countries will be subject to tariffs, or he would demand they purchase more oil and natural gas from the U.S. despite the fact that U.S. export capacity for gas is close to its limit.

In a statement released on 14 February, the European Commission stated that the "reciprocal trade policy" was a step backwards.

Trump has threatened to impose a "reciprocal rate" of 25% on European goods. Pharmaceuticals are among the industries that could be affected, since U.S. companies such as Johnson & Johnson, Pfizer, and others have large facilities in Ireland. Ireland is also a leading exporter of medical equipment.

In response to the U.S. blanket tariffs on aluminum and steel, the European Union announced on March 12 that it would begin imposing counter-tariffs next month on goods worth 26 billion euros.

Trump announced on March 13 that he would impose a tariff of 200% on European wines and spirits as a response to the EU's plan to levy tariffs on American whisky and other products in April.

PRODUCTS

AUTOMOBILES: Trump announced on March 5, that he would exempt certain automakers, such as the Detroit Three - Ford, General Motors, and Jeep owner Stellantis - from his 25% tariffs against Canada and Mexico if they comply with a free trade agreement.

According to these rules, vehicles must contain 75% North American components to be eligible for duty-free entry into the U.S.

Some foreign automakers, such as Honda and Toyota with large U.S. manufacturing footprints would also benefit from the exemption, while others who don't comply will have to pay 25% of tariffs.

Trump also floated the idea that tariffs of up to 100% would be imposed on other vehicles including EVs. In 2024, the automobile industry will account for more than $200 billion in imports from Canada and Mexico.

METALS: Trump announced on February 9 that he would impose tariffs on all imports of steel and aluminum used by automakers and aerospace companies as well as in construction and infrastructure.

More than half of the U.S.'s aluminum and steel imports come from Canada, Mexico, and Brazil.

Trump ordered on February 25, a new investigation into the possibility of new tariffs on imports of copper to rebuild U.S. manufacturing of this metal, which is critical for electric vehicles, military equipment, semiconductors, and a variety of consumer goods.

Just over half of the refined copper that America consumes every year is produced domestically.

SEMICONDUCTORS : Trump stated that tariffs would start at "25%" or more, and increase substantially over a period of one year. However, he did not specify when they will be implemented.

Taiwan Semiconductor Manufacturing Co., the largest contract chipmaker in the world, produces semiconductors for Nvidia and Apple, among other U.S. customers. In 2024, it will generate 70% of its revenues from North American clients.

LUMBER: On March 1, Trump ordered a new investigation into trade that could add more tariffs to imported lumber. This would be in addition to the existing duties on Canadian Softwood Lumber and 25% tariffs for all Canadian and Mexican products.

ALCOHOL: Trump threatened on March 13 to slap 200% tariffs in response to the European Union's plan to impose tariffs next month on American whiskey, and other products. This is itself a retaliation for Trump's 25% tariffs that went into effect on steel and aluminium imports. Reporting by Anjana Anil in Bengaluru, Seher Dareen in London, Puyaan, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, An Mol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmo, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol, Anmol

(source: Reuters)