In recent developments, the United States has noted a significant shift back towards tariff declarations under the leadership of President Donald Trump. This movement signals a re-entry into a global trade conflict, reminiscent of the policies during Trump’s first term. Having been a longtime proponent of tariffs, Trump originally instigated a trade war aimed at China by imposing taxes on numerous Chinese goods. In retaliation, China targeted a range of U.S. products with tariffs, including automotive imports. Moreover, Trump leveraged the threat of tariffs to compel Canada and Mexico to renegotiate the North American trade agreement, which was rebranded as the U.S.-Mexico-Canada Agreement (USMCA) in 2020.
When President Joe Biden took office, he maintained several of the tariffs imposed by Trump on China and introduced some new restrictions, promising a more calculated approach. However, current economic discourses highlight potential widespread repercussions of Trump’s broad-based tariffs, which could elevate costs for consumers worldwide. The uncertainty is exacerbated by Trump’s erratic shifts between imposing and retracting tariff threats, leading to postponed taxes on goods from some of the U.S.’s biggest trade partners.
The timeline of recent events began with Trump’s inauguration, where he pledged to increase tariffs to enrich American citizens. On his first day, Trump declared 25% tariffs on imports from Canada and Mexico to commence in February, while withholding specifics on Chinese imports. As the month progressed, Trump threatened similar measures against Colombia following disputes over U.S. migrant flights, leading to a temporary trade rift that was eventually resolved.
By February, Trump enacted tariffs on Mexico, Canada, and China, invoking a national emergency relating to immigration and drug trafficking as justification. This move drew outrage and promises of retaliation from the countries concerned. Despite announcing pauses in certain tariffs, particularly towards Canada and Mexico, Trump moved forward with tariffs on Chinese goods. China retaliated with tariffs and an investigation into U.S. tech companies.
In February, Trump raised tariffs on steel and aluminum imports, sparking international outcry and discussions on reciprocal tariffs. Speculations arose that countries like India and those within the European Union could soon be facing similar tariff hikes. Trump’s executive orders in late February and early March suggested tariff considerations on copper and lumber imports, citing national security concerns.
The imposition of tariffs on March 4, particularly towards North American neighbors, led Canada to retaliate with significant tariffs on American goods, while Mexico began discussions about potential counter-tariffs. China hiked tariffs on U.S. agricultural products, prompting concerns among investors about the impact on the U.S. economy and causing stock market trepidations.
By mid-March, the European Union prepared retaliatory measures in response to increased tariffs on U.S. metals. Trump’s new threats of extensive tariffs on European wines and spirits followed soon after, contingent on EU action against American whiskey. The month concluded with Trump turning his attention towards Venezuelan oil, threatening additional tariffs on nations importing Venezuelan resources, as well as placing tariffs on auto imports to boost domestic manufacturing, igniting concerns about the global supply chain effects.