The long-declared tariff threats by former U.S. President Donald Trump have now nudged the nation into a new global trade dispute, with ever-increasing duties adding a layer of uncertainty. Trump’s history with tariffs is notable. During his first presidential term, he initiated a trade conflict, notably targeting China by imposing taxes on a significant portion of its goods. This prompted China to respond with retaliatory tariffs on U.S. products, affecting sectors from agriculture to the automotive industry. Additionally, Trump’s use of tariff threats was instrumental in pushing Canada and Mexico to renegotiate the North American trade deal, leading to the 2020 U.S.-Mexico-Canada Agreement (USMCA).
Upon President Joe Biden’s arrival in office, he maintained many of the tariffs previously instated by Trump on Chinese imports, albeit under the pledge of a more strategic focus. Fast-forwarding to the present, there’s concern among economists about the potentially severe impacts on businesses and global economies if Trump’s broad-scale tariffs are enforced again. The repercussions might result in consumers having to pay higher prices. Moreover, Trump’s previous on-again, off-again approach to tariffs and the resulting retaliations have contributed to a climate of unpredictability. This includes some recent decisions to delay taxes on goods from major trade allies.
As of January 20, when Trump was inaugurated, he pledged once more to “tariff and tax foreign countries to enrich our citizens” and mentioned plans for an agency named the External Revenue Service, which has not yet materialized. Immediately, Trump proposed a 25% tariff on Canadian and Mexican imports to begin on February 1, keeping his intentions for Chinese imports vague.
By January 26, Trump was already vocal about implementing a 25% tariff on imports from Colombia following a diplomatic standoff with Colombian President Gustavo Petro. Although Colombia initially planned a counter-tariff on U.S imports, the situation de-escalated shortly afterward.
Trump accelerated his trade policy maneuvers on February 1, signing an executive order imposing tariffs – 10% on Chinese goods and 25% on both Mexican and Canadian imports. This decree, justified as addressing national emergencies such as illegal immigration and drug trafficking, put the USMCA on precarious ground. The move led to a prompt outcry and threats of retaliation from the involved countries.
A brief reprieve followed on February 3 with Trump pausing his tariff plans on Mexico and Canada for 30 days, due to their collaborative steps concerning border security and narcotics. However, tariffs on Chinese goods were enforced on February 4. In response, China instituted its own set of taxes on several American products and began an antitrust probe on Google.
Following this, on February 10, Trump signaled an increase in tariffs on steel and aluminum, blindsiding previous exemptions. He also floated the idea of “reciprocal” tariffs on February 13, aiming to adjust U.S. tariffs to match those of other countries, which economists criticize as potentially destabilizing.
Between February 25 and March 1, Trump targeted additional imports, suggesting tariffs on copper, lumber, and timber, under the premise of national security. By March 4, tariffs against Canadian and Mexican imports were enforced, albeit reduced to 10% for Canadian energy. Concurrently, tariffs on Chinese goods increased to 20%. This action provoked a wave of retaliations and additional tariffs from Canada, Mexico, and China on American goods.
By March 5, discussions with major U.S. automakers resulted in a temporary pause on tariffs concerning Mexican and Canadian goods. The pause widened on March 6, even as plans for “reciprocal” tariffs remained firm for early April.
Through mid-March, despite tentative diplomacy easing relations with Mexico and Canada, ongoing tensions saw Trump considering hefty tariffs on European products if the EU retaliated. The European reaction was contingent on planned U.S. tariff hikes on steel and aluminum products.
By March 24, Trump threatened a 25% tariff on imports from countries purchasing oil or gas from Venezuela, including new levies on Venezuelan products. This move, chiefly aimed at China, would complicate international trade dynamics where the U.S. also partakes in Venezuelan oil transactions.