The tariff war imposed by Trump on other countries has been gaining momentum. The stated objectives of this kind of policy are to "fix" the unfair trade practices and increase federal budget revenues, while also serving as leverage on foreign countries as an alternative to sanctions, that, according to Trump, have lost effectiveness altogether. Moreover, his administration intends to embrace a wide use of so-called "reciprocal tariffs" — a country that decides to retaliate is going to suffer even more from new ones to emerge. Tariffs will be combined with incentives for companies to produce goods in the United States, and they are promised faster construction permits and lower taxes. Proceeds from import duties are planned to be used for tax benefits. Trump is willing to extend income tax breaks introduced in 2017 (the deadline expires in late 2025), as well as tax relief for tips, social security payments, and a reduction in corporate tax from 21 to 15 percent. These moves are estimated to reduce budget revenues by $4.6 trillion over a decade.
Let us note that so far, high US duties only apply to certain categories of goods. The average rate for manufactured goods is a mere two percent, and half of imports (94 percent of all imports) is not subject to tariffs at all. Trump has also suggested imposing those on all imports at once and significantly raise rates for certain product categories. He wants to introduce a 25-percent tariff on steel and aluminum imports starting March 12, and also instructed the Ministry of Commerce to consider potential one on copper imports. Even measures already announced are about to radically changing US trade policies, along with the entire global trade "landscape".
The first stage features Trump and his team focus on imports from China, Canada, and Mexico. These are the three major trading partners of the United States, accounting for about 40 percent of all its foreign trade last year. However, the tariff policy against them has certain finer points.
In relation to China, it is based on strict import restrictions. Thus, early March witnessed Trump double tariffs on all goods from that country from 10 to 20 percent. He explained the decision by "China’s failure to curb the flow of deadly synthetic opioids into the US." Another part of his new trade initiative is to lift tariff exclusions for "de minimis" goods coming from China and Hong Kong (parcels worth less than $800). As a result, Chinese marketplaces popular with the American consumers have lost their duty-free route.
China’s response was not long in coming. Starting March 10, additional duties of up to 15 percent were imposed on a number of American goods, including new 15-percent ones on corn and 10-percent ones on soybeans. Restrictions have also appeared against products from 15 American companies, Leidos and General Dynamics Land Systems included. Lou Qinjian, spokesperson for the third session of the 14th National People's Congress (NPC), told reporters that China's relations with the United States will be inevitably accompanied by discord, but tolerating pressure or threats is out of question for Beijing. Moreover, calls to resolve things at the negotiating table have remained unanswered by the United States.
With regard to Mexico and Canada, the current US administration’s stance is not that radical and more resembling the stick and carrot principle. Thus, having announced 25-percent tariffs on all their imports worth a total of $1.5 trillion starting March 4 (an exception was made for Canadian energy carriers, which would only suffer 10-percent ones), the US administration subsequently suggested that the Mexican authorities initiate trade restrictions on goods from China in exchange for concessions. US Commerce Secretary Howard Lutnick discussed the "idea" with his Mexican counterpart Marcelo Ebrard at their February 20 meeting in Washington. Later, Ebrard pointed to the beginning of a constructive dialogue in this X account, announcing further collaboration. Proposals under discussion include Mexican duties on Chinese cars and spare parts for them, Bloomberg reported citing a source. Back then, the meeting ended with an agreement on establishing a joint working group to discuss "trade and tariff issues," but Mexico committed itself to no obligations. Later, US Treasury Secretary Scott Bessent called Mexico's proposal to impose the same duties on Chinese goods as US tariffs a "very interesting step". “I think it would be a nice gesture if the Canadians did it also so in a way we could have fortress North America from the flood of Chinese imports that's coming out of the most unbalanced economy in the history of modern times.”
However, this "flexible" approach to the introduction of agreed duties has not yielded results as yet, and on March 4, the previously announced tariffs for Canada and Mexico entered into force, with Trump ruling out any new temporary delays. At the same time, the intensive round of negotiations that preceded the duties cannot be considered accomplished. Earlier, officials with the administration of Mexican President Claudia Sheinbaum said the country was seeking "more coordinated" measures with the United States as regards Chinese trade. And Mexico's Deputy Minister of Economy, Vidal Llerenas, said his country could undertake additional trade measures beyond the tariffs it had already imposed on Chinese goods. In turn, US Commerce Secretary Lutnick said Trump was considering certain benefits to companies that would comply with the rules under the US-Mexico-Canada trade agreement. He added that US officials had spent a whole day talking with Mexico and Canada and would keep working with the two neighbors on a partial settlement. He said he expected "some movement" on tariffs: "It will not eliminate the tariffs, but it might modify the tariffs somewhat. That's a decision that will come tomorrow." So, negotiations are likely to continue in order to develop a more coherent policy, which indicates the American administration’s intent to bring Chinese imports to North America under strict control.
As if to show that it won’t stay indifferent to actions like that, China announced 100-percent tariffs on Canadian rapeseed oil and pea imports, and 25-percent ones on pork and certain types of seafood as a response to "discriminatory" tariffs on e-vehicles (100 percent) and steel and aluminum (25 percent), which Ottawa announced back in August 2024 following Washington’s suit. The tariffs will take effect on March 20 to add uncertainty to Canada's export industries (in 2024 China bought $3.5bn worth of these products from Canadas, making it the largest market after the United States).
So, the tariff war has only just begun.
