A global trade war escalated this month after US President Donald Trump imposed sweeping tariffs on most imports, marking the highest US trade barriers in over a century and sparking fears of a global recession. — AFP pic
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Wednesday, 09 Apr 2025 7:00 AM MYT
WASHINGTON, April 9 — A global trade war, sparked by US President Donald Trump, intensified earlier this month after he announced sweeping tariffs on most US imports, stoking fears of a recession, sending jitters across global financial markets and drawing condemnation from leaders around the world.
On April 2, which Trump called “Liberation Day,” he unveiled his plan to impose a 10 per cent baseline tariff on all imports to the United States as well as higher “reciprocal” duties on some of the country’s biggest trading partners.
The base 10 per cent tariffs went into effect on April 5, while the higher reciprocal rates will be effective on April 9.
The new US tariffs amount to the highest trade barriers in more than a century.
However, Trump’s tariff threats have changed over time, leaving other nations and businesses unclear about what is to come next and rattled consumer and business confidence.
Here is a roundup of Trump’s trade-related steps and threats.
Broad tariffs
A cornerstone of Trump’s vision includes a phased rollout of universal tariffs on all US imports.
Trump had tasked his economics team with devising plans for reciprocal tariffs on every country that taxes US imports, and to counteract non-tariff barriers such as vehicle safety rules that exclude US autos, and value-added taxes that increase their cost.
According to Trump, the reciprocal tariffs are a response to barriers put on US goods, while administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, although they cautioned it would take time to see results.
Whereas tariffs were once the mainstay of US tax revenues, in recent decades they have dwindled to a fraction of US tax receipts. Economists say Trump’s policies will be inflationary as importing businesses, which pay levies, will likely pass added costs to consumers.
Specific countries
Trump’s tariff proposals target several key trade partners; some are listed below.
Mexico and Canada: The two countries were the largest trade partners of the US in 2024 through November, with Mexico ranked first. Trump’s new 25 per cent tariffs on imports from Mexico and Canada took effect on March 4 as a retaliation for migration and fentanyl trafficking.
The tariffs included a 25 per cent levy on most goods from Mexico and Canada, along with a 10 per cent duty on Canada’s energy imports. Canada primarily exports crude oil and other energy goods, as well as cars and auto parts within the North American auto manufacturing chain. Mexico also exports various goods to the US in the industrial and auto sectors.
Canada hit back with 25 per cent tariffs on C$30 billion ($21.13 billion) worth of US imports, including orange juice, peanut butter, beer, coffee, appliances and motorcycles.
The Canadian government added that it would impose additional tariffs on C$125 billion of US goods if Trump’s tariffs were still in place in 21 days, with the potential inclusion of vehicles, steel, aircraft, beef and pork.
US Commerce Secretary Howard Lutnick said US officials might still work out a partial resolution with the two neighbors, adding that they needed to do more on the fentanyl front.
On March 12, Canada, the biggest foreign supplier of steel and aluminum to the United States, said it would impose retaliatory tariffs on US imported goods worth C$29.8 billion (RM94.40 billion) in response to Trump’s steel and aluminum tariffs.
While the two countries are currently exempt from the “Liberation Day” tariffs announced on April 2, they do face a separate set of 25 per cent tariffs on auto imports.
Canada has requested WTO dispute consultations with the US over its imposition of import duties on certain steel and aluminium products, as well as the levies on cars and car parts from Canada.
China: Trump levied 10 per cent tariffs across all Chinese imports into the US, effective on February 4, following repeated warnings to Beijing about insufficient measures to halt the flow of illicit drugs into the US
He followed that up with another 10 per cent duty on Chinese goods, effective March 4.
China responded by announcing additional tariffs of 10 per cent to 15 per cent on certain US imports from March 10 and a series of new export restrictions for designated US entities. Later it raised complaints about the US tariffs with the WTO.
On April 2, Trump imposed an additional 34 per cent tariff on China, bringing the total new levy to 54 per cent, which prompted the world’s second-biggest economy to retaliate with a duty of 34 per cent on all US goods.
Trump responded that the US would impose an additional 50 per cent tariff on China if Beijing does not withdraw its retaliatory tariffs on the US, and said “all talks with China concerning their requested meetings with us will be terminated.”
Europe: Trump said the EU and other countries have troubling trade surpluses with the US He has said the countries’ products will either be subject to tariffs or he will demand they buy more oil and gas from the US, even though US gas export capacity is near its limits.
The 27-nation bloc faces 25 per cent import tariffs on steel, aluminium and cars, as well as broader tariffs of 20 per cent from April 9 for almost all other goods. Among vulnerable industries is pharmaceuticals, as US firms such as Johnson & Johnson and Pfizer have large plants in Ireland, which is also a major exporter of medical devices.
The European Union said on April 7 it had offered a “zero-for-zero” tariff deal to avert a trade war, with EU ministers agreeing to prioritise negotiations while striking back with targeted countermeasures next week.
The EU on March 12 said it would impose counter-tariffs on 26 billion euros (RM127.80 billion) worth of US goods from next month in response to Trump’s metals tariffs. The bloc is expected to produce a larger package of countermeasures by the end of April as a response to US car and broader tariffs.
On March 13, Trump threatened to slap a 200 per cent tariff on European wine and spirits in response to the EU plan to impose tariffs on American whiskey and other products next month.
Products
Autos: On March 26, Trump unveiled a 25 per cent tariff on imported cars and light trucks. The 25 per cent levy would be imposed on top of previous duties on imports of finished vehicles starting on April 3.
Trump’s directive included temporary exemptions for auto parts that are compliant with the US-Mexico-Canada Agreement (USMCA) on trade that Trump negotiated during his first term.
Other major automotive parts imports, identified in Trump’s proclamation as “engines and engine parts, transmissions and powertrain parts, and electrical components,” will be subject to the tariffs on a date to be specified in a Federal Register notice, “but no later than May 3, 2025.”
Metals: On March 12, Trump increased tariffs on all steel and aluminum imports to 25 per cent, and extended the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans.
The US is the world’s largest aluminum importer and the second-largest steel importer, with more than half of those volumes coming from Canada, Mexico and Brazil.
Trump on February 25 ordered a new probe into possible new tariffs on copper imports to rebuild US production of the metal critical in electric vehicles, military hardware, semiconductors and a wide range of consumer goods.
The US produces domestically just over half the refined copper it consumes each year.
Semiconductors: Trump said tariffs on semiconductor chips would also start at “25 per cent, or higher,” rising substantially over the course of a year, but didn’t clarify when these will come into effect.
Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, makes semiconductors for Nvidia, Apple and other US clients, and generated 70 per cent of its revenue in 2024 from customers based in North America.
Lumber: Trump on March 1 ordered a new trade investigation that could heap more tariffs on imported lumber, adding to existing duties on Canadian softwood lumber and 25 per cent tariffs on all Canadian and Mexican goods.
Alcohol: Trump on March 13 threatened to slap a 200 per cent tariff on wine, cognac and other alcohol imports from Europe, in response to a European Union plan to impose tariffs on American whiskey and other products next month — which itself is a retaliation to Trump’s 25 per cent tariffs on steel and aluminum imports that took effect the day before.
Pharmaceuticals: While Trump’s “Liberation Day” announcement spared pharmaceutical products from reciprocal tariffs, the president later said duties for the sector were “under review” and warned that it could come in “at a level that you haven’t really seen before.” — Reuters
