Trump's trade tariffs and threats

The global trade war sparked by U.S. president Donald Trump has intensified. He increased tariffs against China, while reversing sweeping duties on most trading partners. This stoked fears of a global recession, sent jitters through global financial markets, and drew condemnation from world leaders.

Trump announced tariffs on imports of semiconductors, which could take effect this week. He also hinted that some companies within the sector might be exempted.

The word "move" means to move.

Exclusion of Smartphones and Computers

The impact of his reciprocal tariffs against China will likely be short-lived.

Trump announced on Wednesday that he would be announcing a new policy.

Temporary reprieve

Tariffs on Chinese Imports are now effectively 145%.

The first initial is

Tariffs starting at 10%

On April 5, a ban on imports from numerous countries was imposed at U.S. ports, airports and Customs.

While Trump's tariff threat has changed over time, other nations and businesses are unsure of what will happen next, and consumer and business confidence is shaken.

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

BROAD TARIFFS

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

Trump's economics team was tasked with developing plans to impose reciprocal tariffs against every country that taxes U.S. Imports. They also had to address non-tariff barriers, such as vehicle safety regulations that exclude U.S. automobiles and value added taxes that raise their price.

Trump said that the reciprocal tariffs were a response to the barriers placed on U.S. products. Administration officials, however, stated that the tariffs will create manufacturing jobs in the United States and open export markets abroad.

In recent decades, tariffs have been reduced to a small fraction of U.S. taxes. Economists claim that Trump's policies are inflationary, as businesses who import goods and pay tariffs will pass on the additional costs to consumers.

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 energy imports from Canada and Mexico, as well as on the majority of goods imported. 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 a 25% tariff on C$30 billion (21,13 billion dollars) of U.S. imported goods, including oranges juice, peanuts butter, beer and coffee, as well as appliances, motorcycles, and appliances.

The Canadian government said that it will impose additional duties on C$125billion of U.S. products if Trump's Tariffs are still in effect in 21 days. This could include vehicles, steel and aircraft, as well as beef and pork.

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.

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

The two countries are exempted from the "Liberation Day", announced on April 2 tariffs, but they face a separate 25% tariff on auto imports.

Canada has asked the WTO to consult with the U.S. about its import duties on steel and aluminum products as well as levies placed on Canadian cars and parts.

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 illicit drug into the U.S.

On March 4, he imposed another 10% tariff on Chinese products.

China announced additional tariffs between 10% and 15% on some U.S. exports starting March 10, as well as a number of new restrictions for certain U.S. entities. It then complained to the WTO about the U.S. Tariffs.

Trump increased the tariffs on China by 34% in April, making the total to 54%. China responded with a 34% duty on all U.S. products.

Trump replied that the U.S. will impose a 50% additional tariff on China if Beijing doesn't withdraw its retaliatory duties on the U.S. and said, "all discussions with China regarding their requested meetings with the us will be terminated."

Washington's new round of tariffs raised duties on China to 145%. Beijing then increased levies against U.S. products by 125% as a result.

Trump has said that the EU, and other countries, have alarming trade surpluses against the U.S. He said that the products of the other countries will be subject to tariffs, or he would demand that they purchase more oil and natural gas from the U.S.

Steel, aluminum and cars will be subject to import tariffs of 25%, while other goods will face tariffs of up to 20%, starting April 9. Pharmaceuticals are among the most vulnerable industries, 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.

The European Union announced on April 7 that it had offered to offer a "zero for zero" tariff deal in order to avoid a trade conflict. EU ministers agreed to give priority to negotiations, while retaliating with targeted countermeasures the following week.

In response to Trump's metals duties, the EU announced on March 12 that it would begin imposing counter-tariffs next month on goods worth 26 billion euros (28 billion dollars) from the United States. As a result of the U.S. auto and wider tariffs, the EU is expected to release a more comprehensive package of countermeasures at the end of April.

Trump announced on March 13 that he would slap 200% tariffs on European wines and spirits as a response to EU plans to impose tariffs next month on American whiskey, among other products.

PRODUCTS

AUTOS: Trump announced a 25% tariff for imported cars and light truck on March 26. The 25% tax would be added to previous duties on imported finished vehicles beginning on April 3.

Trump's directive includes temporary exemptions for auto components that comply with the U.S. Mexico Canada Agreement (USMCA), a trade agreement that Trump negotiated in his first term.

The tariffs will apply to other major imports of automotive parts. These are identified by Trump as "engines, engine parts, transmissions, powertrain components, and electrical component" and they will be imposed on a specific date, which is to be announced in the Federal Register, but no later than "May 3, 2025."

Metals: On March 12th, Trump raised tariffs for all imports of steel and aluminum to 25% and extended duties to hundreds downstream products ranging from nuts and bolts, to bulldozers blades, to soda cans.

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 higher" and increase substantially over the course a year. 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 on wine, cognac, and other alcohol imported from Europe in response to an EU plan to impose tariffs next month on American whiskey, and other products -- which is itself a retaliation for Trump's 25% tariffs that went into effect on steel and aluminium imports the day before.

PHARMACEUTICALS - While Trump's "Liberation Day' announcement spared the pharmaceutical sector from reciprocal duties, the president said that duties were "under review." He warned that the tariffs could be "at a new level you haven't seen before."

Trump

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Smartphones, computers, and other electronics, largely imported from China, are exempt from high tariffs. This is a relief for major technology companies such as Apple, Dell Technologies, and other importers.

This move exempts certain electronics from Trump's baseline 10% tariffs on most goods imported from countries other than China.

(source: Reuters)