Tariffs In The Second Trump Administration

During his second presidency, United States president Donald Trump enacted a series of steep protective tariffs affecting nearly all goods imported into the United States. From January to April 2025, the average effective US tariff rate rose from 2.5% to an estimated 27%, the highest level in over a century. Following policy rollbacks prompted by economic turmoil, the average effective tariff rate stood at 15.6% as of June 2025.

Trump raised steel and aluminum tariffs to 50%, introduced a 25% tariff on imported cars, and ordered investigations into pharmaceuticals, copper, and other sectors to support future tariffs. He also invoked unprecedented powers under the International Emergency Economic Powers Act (IEEPA) to impose broad, universal tariffs affecting all imports. Although federal courts ruled this use of the IEEPA unconstitutional, the decisions were stayed pending appeal, allowing the tariffs to remain in effect. Oral arguments on the appeals are scheduled for July 31, 2025.

On April 2, 2025—a day he called "Liberation Day"—Trump invoked the IEEPA to announce "reciprocal tariffs" on all countries not subject to other sanctions. A universal 10% tariff took effect on April 5. Additional tariffs for 57 major trading partners were planned for April 9, but were postponed until July 8 following a stock market crash triggered by the tariffs. Trump also imposed 25% tariffs on Canada and Mexico under the IEEPA, but later exempted goods compliant with the the United States–Mexico–Canada Agreement (USMCA). He escalated the China–United States trade war, with baseline US tariffs on Chinese goods peaking at 145% and Chinese tariffs on U.S. goods reaching 125%. Following a trade agreement, the US reduced its tariffs to 30% and China to 10%. US tariffs on Chinese ''de minimis'' shipments were lowered to 54%. China also agreed to resume exports of critical rare earth elements it had curtailed in retaliation.

The Trump administration argues that its tariffs will promote domestic manufacturing, protect national security, and substitute for income taxes. The administration views trade deficits as inherently harmful, a stance economists criticized as a flawed understanding of trade. The tariffs contributed to downgraded GDP growth projections by the US Federal Reserve, the OECD, and the World Bank. In the first quarter of 2025, US firms and consumers raced to stockpile foreign goods before new tariffs took effect, causing imports to soar 41.3%.

Background

Since the 1980s, Trump has advocated for import tariffs as a tool to regulate trade and retaliate against foreign nations that he believes have been disadvantageous to Americans. In his campaigns for the US presidency, Trump promised to use tariffs to achieve a wide range of goals, including preventing war, reducing trade deficits, improving border security, and subsidizing childcare. Although Trump has said foreign countries pay his tariffs, US tariffs are fees paid by US consumers and businesses either directly or in the form of increased prices. He has also claimed that tariff revenues could eventually replace income taxes, however tariffs would only raise $2.4 trillion over the course of a decade, whereas the IRS collects $2 trillion per year; furthermore, tariff revenues would be expected to decrease over time, given a presumed reduction of imports. Shortly after being reelected, Trump acknowledged that tariffs might cause "some pain" for Americans but insisted "it will all be worth the price that must be paid".

In 2018, Trump imposed tariffs on steel and aluminum imports, resulting in price increases for Americans. The World Trade Organization (WTO), a regulator of international trade, ruled some of Trump's first term tariffs that the implementation violated global trade rules. In December 2021, the price of one metric ton of hot-rolled band steel was $1,855 in the US compared to $646 in China and $1,031 in Europe. While he and his first successor, Joe Biden, rolled back some of these tariffs, most remained in place by the start of Trump's second term. Trump also launched a trade war with China which subjected 60% of US-China trade to 20% tariffs and was widely characterized as a failure for the United States.

In May 2019, Trump used tariff threats of up to 25% on Mexico to negotiate an expansion of his " Remain in Mexico" policy and the deployment of Mexican soldiers to help control illegal immigration. Mexico deployed nearly 15,000 troops to its border with the US and 6,500 troops to its border with Guatemala. In 2020, the US, Mexico and Canada renegotiated NAFTA as the United States–Mexico–Canada Agreement (USMCA) and recommitted to 0% tariffs on most products traded between them. Five weeks after the USMCA went into effect, Trump used an exemption for national security concerns to implement a 10% tariff on Canadian aluminum after claiming it was flooding the US market. He withdrew the tariff a month later, three hours before Canada planned to retaliate.

Planning

While campaigning for his second term as US president, Trump pledged even larger tariffs than his first term, including 60% on China, 100% on Mexico, and 20% on all other countries. He also proposed tariffs to penalize US companies that outsourced manufacturing, such as a 200% tariff on John Deere. Trump also suggested replacing income taxes with tariff revenue—an idea economists from the Tax Foundation deemed "mathematically impossible". 23 Nobel Prize-winning economists signed a letter warning that Trump's policies, including high tariffs, would "lead to higher prices, larger deficits, and greater inequality".

Trump appointed close economic advisor Peter Navarro as his Senior Counselor for Trade and Manufacturing. Navarro had been recently imprisoned for defying congressional subpoenas related to his role in attempts to overturn the 2020 election, including his " Green Bay Sweep" strategy. Navarro advocates for a permanent regime of trade barriers to balance the trade deficit and wrote books criticizing corporations for prioritizing profits over American jobs. He had served in high-ranking trade roles during Trump's first term but was often rebuffed by free market-minded Trump administration officials such as Gary Cohn, who resigned in protest of Trump's 2018 steel and aluminum tariffs. The ''Financial Times'' reported Navarro would receive more influence and less opposition in Trump's second administration. Navarro began working closely with cabinet nominees Howard Lutnick and Jamieson Greer. ING Group noted that plans for Trump's "reciprocal tariff" policy appeared to align with Navarro's section of Project 2025, titled "The Case for Fair Trade".

Shortly after the 2024 election, Stephen Miran, now chairman of the Council of Economic Advisers under Trump, released a white paper titled "A User's Guide to Restructuring the Global Trading System," which proposed using tariffs as a tool to drive down the value of the dollar through a negotiated ' Mar-a-Lago Accord'. Miran and other key figures in the administration have suggested that the dollar is significantly overvalued because of its status as a global reserve currency, and that tariffs can be used to weaken the dollar and revitalize American manufacturing, although this view has been criticized by some economists. While the administration's ultimate tariff formula did not closely resemble any of Miran's suggestions, the underlying ideas in Miran's white paper remain important in the Trump administration's conduct of trade policy.

Key events and negotiations

January-March 2025

Trump was inaugurated for a second term on January 20, 2025. In his inaugural address, he pledged to "immediately begin the overhaul of our trade system to protect American workers and families." On February 1, he declared several " national emergencies" regarding fentanyl trafficking and invoked the IEEPA to impose 25% tariffs on most goods from Mexico and Canada and 10% on goods from China. Tariffs on USMCA-compliant Mexican and Canadian goods were soon suspended, but the "fentanyl tariff" on Chinese goods was raised to 20% on March 4. On February 13, Trump announced plans to impose "reciprocal tariffs" on all countries with trade barriers against the US in April, prompting a wave of diplomatic outreach.

Analysts and foreign governments expressed confusion over the administration's tariff strategies and openness to negotiation. Trump varyingly stated that tariffs would be lifted following trade negotiations, retained to tax foreign goods to fund government spending, or used to discourage foreign goods and protect US manufacturing. Canada alleged that tariffs on its exports were intended to damage its economy and pressure annexation into the United States. Vietnam offered to eliminate all tariffs on American goods, but economic advisor Peter Navarro dismissed the proposal. "This is not a negotiation," he said. "This is a national emergency based on a trade deficit that's gotten out of control."

On March 2, the administration imposed 25% tariffs on imported steel and aluminum products. First-quarter US GDP fell -.03%. US firms and consumers stockpiled foreign goods before new tariffs took effect, causing imports to soar 41.3%.

April-June 2025

On April 2, a day he called "Liberation Day", Trump declared an emergency regarding the national deficit and announced "reciprocal tariffs" on all countries not subject to other sanctions. A baseline 10% tariff on nearly all US imports took effect on April 5. Panic induced by the announcement led to a severe stock and bond market crash. Planned April 9 tariff increases on 56 countries were delayed 90 days, to July 8. After a retaliatory spiral, US tariffs on Chinese goods rose to 145% and Chinese tariffs on US goods rose to 125%. Steel and aluminum tariffs, a 25% tariff on automobiles imposed April 3, and other sector-specific duties also remained. ''Politico'' estimated the average effective US tariff rate reached 27%, the highest level in over a century.

On April 21, CEOs of major US retailers warned Trump that the escalating trade war with China would lead to visible price increases and product shortages in two weeks. The first cargo ships carrying Chinese goods tariffed at 145% arrived on May 6 with shipments cut in half. Trump reportedly pivoted focus toward negotiation, sidelining Navarro and promoting Scott Bessent as his lead economic advisor. By June, the US reached trade deals with the UK and China. The UK agreement reduced select tariffs but kept the 10% baseline. China lowered tariffs on US goods to 10% and resumed are earths exports; the US lowered its tariff on Chinese goods to 30% (10% baseline + 20% fentanyl) and cut ''de minimis'' tariffs to 54%. Trump stated the 10% tariff would remain for all countries even after negotiations. Trump announced the 10% baseline tariff would remain for all countries even after negotiations.

On May 28, the United States Court of International Trade unanimously ruled that Trump had exceeded his authority by imposing the "fentanyl tariffs" and "reciprocal tariffs". The Court of Appeals for the Federal Circuit granted a temporary stay the next day, allowing the tariffs to remain in effect while it considered the case. The court set oral arguments for July 31.

On June 4, 2025, Trump increased tariffs on steel and aluminum imports from 25% to 50%. On June 12, steel tariffs were expanded to include a range of household appliances including refrigerators and dishwashers.

Legality

Although the US Constitution grants Congress the sole authority to levy taxes, including tariffs, Congress has passed laws allowing the President to impose tariffs for national security reasons unilaterally. In his second term, Trump added tariffs to steel, aluminum, and auto imports under Section 232 of the Trade Expansion Act (TEA), which allows the President to modify imports if the Secretary of Commerce conducts an investigation, holds public hearings, and determines that the imports threaten national security. Trump directed the USTR to initiate similar investigations to impose tariffs under Section 301 of the Trade Act of 1974.

Trump also invoked unprecedented powers under the National Emergencies Act (NEA) and the International Emergency Economic Powers Act (IEEPA) by declaring multiple "national emergencies" related to border security, energy, and trade deficits. Declaring these emergencies allowed Trump to enact tariffs quickly without following the complex procedures required by TEA or other trade statutes. While the IEEPA had been used for sanctions, it had never before been used for tariffs. As he signed the orders, Trump stated that declaring an emergency "means you can do whatever you have to do to get out of that problem." ''The New York Times'' reported that "many economists and legal experts believe that the idea of an emergency has been concocted to justify Mr. Trump's desire to impose sweeping import duties without regard to congressional approval or international trade rules."

To terminate a national emergency under the NEA, a member of Congress may file a privileged resolution requiring their chamber to vote on the topic within 15 days. Democratic representatives introduced resolutions to end several of Trump's national emergencies justifying tariffs, but these efforts were blocked by the Republican congressional majority. JD Vance cast a tie-breaking vote in the Senate to uphold the emergency underpinning the "Liberation Day" tariffs.

Several countries initiated disputes regarding Trump's tariffs with the World Trade Organization (WTO), a regulator of international trade. However, the United States has de facto paralyzed the WTO since 2019 by blocking new appointments to its Appellate Body. Without a functioning Appellate Body, no final rulings can be made. On March 4, 2025, the US notified the WTO that it would suspend contributions to its budget indefinitely. The US was set to provide about 11% of the WTO's $232 million 2024 budget, a fee based on the country's share of global trade.

At least seven cases were filed in American federal courts challenging Trump's authority to impose tariffs under IEEPA. In May 2025, the United States Court of International Trade (CIT) held hearings for ''V.O.S. Selections, Inc. v. Trump'' and ''Oregon v. Trump.'' On May 28, the CIT unanimously ruled that Trump had overreached his authority under the IEEPA and vacated all tariffs related to it. They concurred with the plaintiffs that IEEPA "does not authorize any of the worldwide, retaliatory, or trafficking tariff orders." The next day, an appellate court stayed the decision, allowing the tariffs to remain in effect while it considered the case. A Washington D.C. district court issued a similar ruling the next day, but the resulting order was stayed for fourteen days to allow for appeal.

Multinational tariffs

Steel and aluminum tariffs

On March 12, 2025, the US imposed 25% tariffs on all steel and aluminum imports, aiming to strengthen domestic production. On April 2, 2025, aluminum tariffs expanded to include empty aluminum cans and canned beer. The measures expanded Trump's first-term steel and aluminum tariffs by eliminating all exemptions and raising the aluminum tariff from 10% to 25%. The administration argued previous exemptions "inadvertently created loopholes that were exploited by China and others with excess steel and aluminum capacity". Trump also mandated that steel be "melted and poured" and aluminum "smelted and cast" in the US to qualify for duty-free status to prevent tariff circumvention. Commerce Secretary Howard Lutnick said Trump would soon add a copper tariff as well. On May 30, 2025, Donald Trump announced double tariff on steel and aluminium imports from 25% to 50% since June 4.

In 2023, the US imported 44% of its aluminum and 26% of its steel. Canada was its largest supplier of both, accounting for more than half of aluminum and two-thirds of primary aluminum imports. While the US was the world's largest producer of aluminum through 2000, it accounted for less than 2% of the global supply by 2021, largely due to high electricity costs that made it less competitive in the global market. In 2021, primary aluminum smelters operated at 55% capacity in the US compared to 95% in Canada and 88% globally. The US remained a major producer of less energy-intensive secondary aluminum, but secondary aluminum is less desirable for defense or electronics.

Tariffs on steel and aluminum imports were increased to 50% on June 4, 2025. The UK remained at 25% while it continued to negotiate a trade deal announced the previous month. On June 12, the White House announced steel tariffs would expand to include a range of major household appliances beginning on June 23, 2025.

Automobile and auto part tariffs

In January 2025, President Trump announced broad tariffs on Canada and Mexico, threatening the highly integrated North American auto supply chain. Due to decades of free trade agreements including USMCA, factories in the US, Canada, and Mexico grew accustomed to shipping auto parts back and forth multiple times during the manufacturing process. The three largest US automakers— Ford, General Motors, and Stellantis—lobbied for exemptions, warning the tariffs would hurt American companies more than foreign competitors. Ford CEO Jim Farley warned investors, "Long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the US industry that we have never seen." Trump agreed to delay tariffs on USMCA-compliant vehicles. Still, non-USMCA compliant brands manufacturing in Canada or Mexico, such as BMW, were affected starting March 4, 2025. BMW chose to cover these tariffs until May 1, 2025.

The USMCA exemption closed on April 3, when Trump imposed a new 25% tariff on all imported cars, including those from Mexico and Canada. Economist Arthur Laffer estimated car prices would increase by $4,711, compared to $2,765 if the USMCA exemption remained available. The White House argued the move would boost domestic manufacturing and generate $100 billion in tax revenue, noting that about 50% of the 16 million cars bought by Americans in 2024 were imported. The same day, Stellantis announced it would temporarily close factories in Canada and Mexico and lay off 900 American employees as it assessed the impact of tariffs.

Trump announced some relief after US automakers requested more time to move their supply chains. While the 25% tariff extended to auto parts on May 3, Trump exempted parts made in Mexico or Canada that were compliant with the USMCA. On April 29, he exempted carmakers who pay a 25% on imported cars from paying other tariffs, such as those on steel and aluminum. He also provided a rebate on a proportion of tariffs paid for the next two years. In May, US automakers criticized Trump's first trade deal for making it cheaper to import a car from the UK than one of their cars assembled in Mexico or Canada using US parts.

''De minimis'' exemption closure

Trump's February 2025 executive orders announcing tariffs on imports from China, Mexico, and Canada initially closed the US ''de minimis'' exemption for imports from all three countries. The ''de minimis'' exemption waives standard customs procedures on low-value packages to reduce administrative burdens. US Congress quadrupled the ''de minimis'' threshold from $200 to $800 in 2016, resulting in an over 1000% increase in shipments claiming the exemption by 2023. The US threshold was among the highest globally, over five times the size of the European Union's, and used by many companies to send goods to the US without close inspection or taxes. The largest beneficiaries were Chinese e-commerce companies such as Shein and AliExpress. Some shipments were linked to drug trafficking. However, by February 7, 2025, Trump reopened the ''de minimis'' exemption for all three target countries to avoid overwhelming US customs officials.

On April 2, 2025, Trump closed the exemption for China and Hong Kong again, beginning May 2. Imports shipped via the Universal Postal Union (UPU), of which USPS is a member, would be subject to a duty of 120% of the shipment's value or $100 per package—rising to $200 after June 1. Shipments by all other carriers, such as UPS and FedEx, became subject to all applicable standard duties—a minimum of 145% for Chinese goods. Trump directed that the ''de minimis'' exemption be closed for all countries in the future, once "adequate systems are in place" to collect duties. Following the closure, Chinese e-commerce company Temu said it would stop selling goods from China directly to US customers.

Following trade talks between the US and China, the US cut tariffs on ''de minimis'' shipments from China to 54% beginning May 14.

Additional proposals

Digital Sales Tax investigation

On February 21, 2025, Trump issued a presidential memorandum ordering the Office of the United States Trade Representative (USTR) as well as other officials, including Peter Navarro, to investigate digital service taxes (DSTs) and determine whether to take retaliatory action. A fact sheet accompanying the memo emphasized that the European Union's Digital Markets Act (DMA) and Digital Services Act (DSA) would face scrutiny.

DSTs are taxes on revenue from digital services, such as online advertising and selling user data. These taxes allow countries to collect revenue from multinational companies that provide digital services in their jurisdiction. USTR investigations initiated during Trump's first term led to tariff threats on several countries under authority granted by section 301 of the Trade Act of 1974. On October 8, 2021, over 135 countries participating in the OECD negotiations agreed on a two-pillar approach to reform and withdraw DSTs called the " Global tax deal". The Pillar One deadline was December 31, 2023, but it was subsequently extended to December 31, 2024. As of January 2025, Trump withdrew from Pillar Two of the agreement, and many countries' DSTs remain in effect.

Secondary tariffs

"Secondary tariffs" are a new trade policy introduced by the second Trump administration that resembles secondary sanctions. Unlike primary tariffs, which directly target a specific country, secondary tariffs penalize the third-party countries or entities that trade with the targeted nation. On March24, following actions such as the March 2025 Venezuelan deportations, Trump signed an executive order imposing a 25% tariff on nations that purchase oil from Venezuela at the Secretary of State's discretion. He subsequently threatened secondary tariffs on countries buying Russian oil, unless Russia agreed to a peace treaty with Ukraine, and on countries that trade with Iran. In June 2025, a majority of U.S. senators supported secondary sanctions against Russia that would impose 500% tariffs on countries that buy Russian oil, natural gas, uranium and other exports. China and India are the major consumers of Russian energy.

Solar panels

During his administration, President Joe Biden announced preliminary tariffs of 21.31% to 271.2% on Chinese solar panel makers with factories in Malaysia, Cambodia, Vietnam, and Thailand to support American manufacturers complaining of dumping. The Biden administration raised the alarm over China's high investments in factory capacity for clean energy goods. The Commerce Department was expected to set final determinations by April 18, 2025. In April, under the second Trump administration, the Commerce Department finalized plans with the lowest tariff at 41%. Products from Cambodia faced duties of 3,521% because its producers did not cooperate with the US investigation. The International Trade Commission will vote on the plans in June.

Films

In a social media post on May 4, Trump announced he would authorize the Department of Commerce and the USTR to begin the process of instituting a 100% tariff on all films "produced in foreign lands". Trump claimed the US film industry was dying a "very fast death" due to the incentives that other countries were offering to draw American filmmakers. He described these incentives as a "national security threat" and the films as "propaganda."

US film production has increasingly moved to lower-cost locations overseas, resulting in job losses for American industry workers. Secretary of Commerce Howard Lutnick responded, "We're on it". A White House spokesperson said the administration was exploring options but no final decisions had been made.

Toys

US President Donald Trump initially threatened to impose 100 percent tariffs on toy-maker Mattel after the company said it would diversify its production to other countries, but not the United States. Trump later stated in the Oval Office on May 8, 2025, he also stated that the company won't sell "one toy in the United States", if they did that. Additionally, President Donald Trump, clearly stated during an interview with Meet the Press, that he did not "think that a 'beautiful baby girl' would possibly need to have 30 dolls (referring to Mattel's dolls brand, Barbie). He also added that he thought they could be happy with "three dolls or four dolls" because what U.S. companies "were doing with China was just unbelievable."

"Reciprocal" tariff policy

Announcement

On February 13, 2025, Trump directed his staff to research both monetary and non-monetary trade barriers imposed by foreign countries against US exports and to develop custom "reciprocal tariffs" to counter and penalize each one. He instructed them to consider factors such as existing tariffs, exchange rates, and trade balances in their analysis. Lutnick said his team would have a plan ready by April 1, 2025. Trump announced that he would unveil the reciprocal tariffs on April 2, 2025, a date he referred to as "Liberation Day".

On April 2, 2025, Trump declared a national emergency to address what he described as a "large and persistent US trade deficit", enabling him to invoke the IEEPA to impose a 10% tariff on all imports to the US, effective April 5, 2025. He also announced higher tariffs for 57 countries and territories set to begin April 9. The White House said these tariffs would be applied in addition to existing measures on Chinese imports, resulting in an effective tariff rate of 54% on Chinese goods after April 9, 2025. ''Politico'' described the measures as "the most significant US protectionist trade action since the 1930s", when Congress passed the Smoot–Hawley Tariff Act. Federal Reserve chairman Jerome Powell described the tariffs, and their likely economic impact, as "significantly larger than expected."

Excluded goods

The following goods were not impacted by additional tariffs, including the 10% baseline tariff:
* All articles subject t
50 USC 1702(b)
such as books and other informational materials
* Steel and aluminum products, which were separately impacted by a 25% universal Section 232 tariff
* Automobiles and automobile parts, which were separately impacted by a 25% universal Section 232 tariff
* Copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products, some of which were under investigation for Section 232 tariffs
* Any products that become subject to future Section 232 tariffs
* Products from Mexico and Canada compliant with USMCA, except for goods targeted by Section 232 tariffs
* Imports from countries subject to Column 2 of the HTSUS, which at the time were Cuba, North Korea, Russia, and Belarus.
* Smartphones, computers and various electronic parts.

Development

Reuters reported the Trump administration struggled to design reciprocal tariffs because each of the 186 members of the World Customs Organization applied different duties. The administration initially considered dividing all countries into tiers of high, medium, and low trade barriers. Later, Treasury Secretary Scott Bessent and National Economic Council director Kevin Hassett told Fox Business that the administration would focus on the United States' largest trading partners and assign individualized tariff rates. Hassett stated that "more than 100 countries don't really have any tariffs on us and don't have any non-tariff barriers" and that only "10 to 15 countries" were a concern.

However, on March 30 Trump told reporters, "I don't know who told you 10 or 15", dismissing the idea as a "rumor" and saying he would impose tariffs on "all countries". Although many countries attempted to negotiate deals in the weeks leading up to April 2, no exemptions were granted. The lack of clarity contributed to economic volatility and the beginning of the 2025 stock market crash.

Bloomberg News reported Navarro urged Trump to adopt a 25% minimum import tariff or a "reciprocal" tariff formula based on trade deficits, while Bessent and Hassett proposed more nuanced and targeted tariffs. Bessent encouraged using tariffs primarily as a negotiating tool, while Navarro saw them as a means to transform trade relationships. Ultimately, Trump adopted Navarro's idea of "reciprocal" tariffs.

Formula calculation

Soon after the unveiling, financial journalist James Surowiecki reported that the final "reciprocal tariff" policy appeared to calculate the value of a country's trade barriers by dividing the US trade deficit with the country by the value of US imports from the country, where both the trade deficit and the imports focus only on goods, rather than both goods and services. The "reciprocal" tariff rate Trump imposed was then calculated by dividing that value in half. For example, dividing the US's 2024 trade deficit in goods with China, $295 billion, by the amount that the US imported from China, $439 billion, results in the 67% trade barrier value the US assigned to China: $295bn ÷ $439bn = 0.67 which, as a percentage, is 67%.

The Trump administration later published their trade barrier formula online, which simplified to the same formula. With variable ''i'' representing a country, ''m_i'' representing imports of goods from that country, and ''x_i'' representing exports of goods to that country, the formula given by the White House is as follows:

The Trump administration formula included measures of elasticity set at ''ε'' = −4 and ''φ'' = 0.25, then multiplied them for ''ε'' × ''φ'' = −1, which resulted in no change except to make the result positive when ''ε'' × ''φ'' was multiplied to other parts of the calculation as defined in the formula. Thus, with ''x_i'' − ''m_i'' being the trade deficit for goods, the formula simplifies to Surowiecki's:

The "discounted" tariff rate is then calculated by dividing the result by 2, making the final formula:

The Trump administration's Office of the United States Trade Representative (USTR) explained that the tariffs "are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners", aiming to "drive bilateral trade deficits to zero". However, even countries with which the US runs a trade surplus, such as Australia, received a tariff of 10%.

Reactions

USTR cited research papers by several economists, many of whom publicly criticized the formula and stated the White House had misinterpreted and incorrectly applied their research. Anson Soderbery, whose work was cited, said his research was meant to discourage exactly the types of policies the White House was implementing. Brent Neiman said the administration used the wrong variable from his research—leading to results four times too high—and that trade deficits reflect economic fundamentals, not unfair trade.

Some economists likened fears over trade deficits to worry about having a "deficit" with a grocery store, emphasizing that buying more than you sell in a mutually beneficial exchange is not inherently problematic. Economic experts criticized the formula for being overly simplistic with little relation to trade barriers, with ''The Economist'' describing it as "almost as random as taxing you on the number of vowels in your name." Some media outlets noted that this was the same formula that was obtained by asking ChatGPT and other large language models for a global tariff formula that compensates for trade deficit.

Treasury Secretary Scott Bessent told "every country" on April 3: "do not retaliate, sit back, take it in, let's see how it goes, because, if you retaliate, there will be escalation." After the stock market lost significant value the next day, President Trump said events were "going very well" and "markets are going to boom, the stock is going to boom, the country is going to boom." On April 6, while the stock markets continued to fall, Trump said that his tariffs "are already in effect, and a beautiful thing to behold."

In April 2025, a Reuters /Ipsos poll found that 73% of Americans expect a price surge under the Trump tariffs while 57% oppose the tariffs. Trump also saw a drop in his overall approval rating following the announcement.

Impacted regions

The White House's initial list of impacted areas included the Heard Island and McDonald Islands, a remote uninhabited Antarctic territory of Australia. A tariff of 29% was proposed for Norfolk Island, which has a population around 2,000 and also belongs to Australia; the rest of Australia received a tariff of 10%. The initial list also proposed tariffs of 10% on the British Indian Ocean Territory, whose population is solely composed of the inhabitants of the joint American-British military base of Diego Garcia, numbering some 3,000 American and British military contractors. The decision to impose tariffs on some of these regions appears to have been based on inaccurate trade data. An analysis of United States import records by ''The Guardian'' revealed that some shipments were erroneously recorded as originating from remote territories instead of their actual countries of origin. These misclassified imports included items such as wine, aquarium systems, and Timberland boots.

The highest tariffs of 50% were placed on Lesotho, described by Trump as a country that "nobody had ever heard of"; a 50% tariff was also initially proposed for France's Saint Pierre and Miquelon islands, with a population of around 5,000. Other countries facing some of the highest tariffs are Cambodia (49%), Laos (48%), Madagascar (47%), Vietnam (46%), and Myanmar (44%).

Exempt countries

Six countries were exempted from the reciprocal tariffs: Belarus, Canada, Cuba, Mexico, North Korea, and Russia.

The White House said that Canada and Mexico were exempted because Trump previously imposed tariffs of 25% on the two countries for non-USMCA goods.

Press Secretary Karoline Leavitt said that Russia had been spared the tariffs because American sanctions on Russia already "preclude meaningful trade" between the two countries, and Treasury Secretary Scott Bessent said it was because the USA has no trade with Russia. This was despite the value of US-Russian trade being $3.5 billion in 2024, greater than US trade with countries such as Mauritius or Brunei, who were tariffed by 40% and 24% respectively.

Similarly, Leavitt cited that Belarus, Cuba, and North Korea had been exempted because American sanctions on them were already high. However, Syria, which has been under American sanctions for 20 years, did receive a heightened tariff of 41%.

Walk back

The announcement of the tariffs led to a market crash. On the morning of April 9, the head of FX at Deutsche Bank told investors, "We are witnessing a simultaneous collapse in the price of all US assets including equities, the dollar... and the bond market."

That afternoon, Trump announced on ''Truth Social'' that reciprocal tariffs above 10%, which had gone into effect that morning, would be paused for 90 days for all countries except China. China's minimum tariff rate was increased to 145%, while imports from all other countries were sustained at the 10% baseline tariff. Other global tariffs on products like cars, steel, and aluminum remained in effect. The administration exempted goods that were already in transit and that arrive before May 27, 2025, from the new tariffs.

''Politico'' reported that Bessent had flown to Florida a few days earlier to lobby Trump against the tariffs, warning him that the stock market would continue to decline unless he changed course. ''The Wall Street Journal'' reported that while Navarro was busy meeting with Hasset on the morning of April 9, Bessent and Lutnick took advantage of Navarro's absence to meet with Trump again and convince him to pause the tariffs. After the walk back, Bessent said the pause was meant to provide time for bespoke negotiations with each trading partner. Trump told reporters, "I thought that people were jumping a little bit out of line... You know, they were getting a little bit yippy, a little bit afraid". He said he had been watching the bond market, which had shown signs of crashing the night before.

Stocks surged within minutes of the announcement, with the S&P 500 rising 9.52% for its largest one-day gain since 2008. Citigroup, Citi analysts warned, "We do not see the scenario as being as encouraging as markets do," noting that the remaining tariffs still represented a substantial new burden. Analysts at Bloomberg Economics estimated the US's average tariff rate would still rise to 24% from 2% the year prior. Pacific Investment Management, one of the world's biggest bond investors, kept estimates of a US recession at 50/50 "even if the 90-day reprieve turns into a longer stint". On April 11, the administration announced it would further exempt electronics such as smartphones and computers from the reciprocal tariffs, but warned they may be subject to future Section 232 tariffs. Chinese technology imports would continue to face a 20% tariff.

At a May 28, 2025 press conference, Trump was asked about his reaction to the term TACO, coined by Financial Times commentator Robert Armstrong, which stood for Trump Always Chickens Out in reference to his tariffs and reversals. Trump responded by saying that it was part of his tactic: "It's called negotiation."

Trade conflicts by country

Canada and Mexico

Three weeks after Trump won reelection, he announced a 25% tariff on all imports from Canada and Mexico unless they took action against illegal immigration and drug trafficking, particularly fentanyl. Mexican President Claudia Sheinbaum and then-Canadian Prime Minister Justin Trudeau sought to de-escalate tensions. While Trudeau noted that less than 1% of illegal border crossings and less than 1% of fentanyl into the US come from Canada, he unveiled a $1.3 billion security plan for the Canada–United States border, Canada–US border on December 16, 2024. Despite these efforts, on February 1, Trump ordered the tariffs to begin February 4, with a reduced 10% rate for Canadian energy products. Bloomberg News reported that Trump advisors Peter Navarro and Stephen Miller (political advisor), Stephen Miller led the economic discussions on the tariffs.

Trudeau and Sheinbaum condemned Trump's actions and threatened immediate economic retaliation, but on February 3, the three leaders negotiated a one-month delay on the tariffs. As part of the agreement, Mexico committed to deploying 10,000 troops to its border with the United States, while Canada pledged to appoint a "fentanyl czar" and continue implementing the border security plan announced in 2024. In return, Trump pledged to take measures to curb weapons trafficking to Mexico and to collaborate with Canada on a joint anti-crime "strike force".

However, on February 27 Trump claimed that "drugs are still pouring into our Country from Mexico and Canada" and reaffirmed his planned tariffs, leading to their implementation on March 4, 2025. Canada retaliated with 25% tariffs on $20 billion () in US goods, with plans to expand to $85 billion (), while Mexico prepared its response for March 9. The ''Wall Street Journal'' warned the tariffs had "the potential to profoundly reshape relations between the US and two of its biggest trading partners, abruptly reversing America's decades-long project of expanding free trade with its allies."

The onset of the trade war triggered stock market declines and economic concerns, particularly for retailers and Automotive industry in the United States, car manufacturers. Lutnick quickly signaled tariff reductions. "The president is listening to the offers from Mexico and Canada. He's thinking about trying to do something in the middle," he said on March 5. The same day, Trump delayed tariffs on USMCA-compliant automakers. The next day, he extended the delay to all USMCA-compliant goods until April 2. While only 50% of Mexican and 38% of Canadian imports were officially compliant in 2024, many companies skipped the paperwork since their goods already qualified for low tariffs under Most favoured nation, most favored nation rules. Officials from both countries expected most exports to be compliant within weeks. Canada retained its initial retaliatory tariffs but suspended the planned increase. Tens of thousands of Mexicans celebrated with Sheinbaum in Mexico City's central plaza.

Although the USMCA exemption was expected to expire on April 2, that day the White House announced it would continue indefinitely. USMCA-compliant auto parts were also exempted from a 25% tariff. However, Trump signed orders imposing 25% tariffs on steel, aluminum, and automobile imports from any country, including Canada and Mexico. Canada, the US's largest supplier of steel and aluminum, was significantly impacted by US tariffs on these products, and retaliated on March 13 with 25% tariffs on an additional $20.6 billion () of US goods. On April 9, Canada implemented a 25% tariff on US-made vehicles that are not compliant with the USMCA.

On April 11, 2025, Trump, threatened Mexico with new tariffs, arguing Mexico had not fulfilled a Treaty relating to the utilization of waters of the Colorado and Tijuana Rivers and of the Rio Grande, 1944 agreement to send 1.75 million acre-feet of water from the Rio Grande via numerous dams and reservoirs. Trump said Mexico had only fulfilled 30% of the agreed quota. He added that "Mexico has been stealing the water from Texas Farmers". Sheinbaum said the quota had not been fulfilled due to a "three-year drought" and suggested that an alternative agreement could be reached.

On April 15, Canada announced several measures to provide relief from tariffs, including a 6-month pause on tariffs on US imports critical for manufacturing, food and beverage processing, healthcare and public safety. The country also exempted automakers that continue manufacturing in Canada and introduced a loan program for large Canadian businesses struggling with financing. On April 28, Mark Carney led the Liberal Party to victory in the Canadian federal election, with the party winning enough seats to form a Minority governments in Canada, minority government. The Liberal Party's victory was partly attributed to the 2025 Canadian boycott of the United States, anti-Trump sentiment that had been rising in the country since Trump's tariff impositions.

On June 4, US steel and aluminum tariffs doubled to 50%. Carney said Canada was in intense negotiations with the US but preparing reprisals if they failed. Canada's aspirations to reach a deal dimmed as it became apparent the US was not in a hurry. However, at the 51st G7 summit the two countries pledged to work on a deal with the next 30 days.

Asia

China

During Trump's first term, the US and China traded multiple rounds of escalating tariff and non-tariff trade barriers beginning in January 2018. In January 2020, the two countries signed a "phase one" trade deal, under which China committed to purchasing $200 billion of U.S. goods and services over the next two years. China failed to meet this target, ultimately importing even less than it had before the trade war. President Joe Biden largely maintained and expanded Trump's tariffs during his administration, and Trump pledged to impose higher tariffs in his second term.
In February 2025, Trump declared a national emergency over Illegal drug trade in China, Chinese drug-trafficking which he used to justify a 10% tariff on all Chinese imports. In March, he increased the tariff to 20%.

China retaliated in February with tariffs of 15% on coals and liquefied natural gas and 10% on oil and agricultural machines and in March with 10-15% tariffs on select US agricultural products. Although these measures were modest in comparison to the US tariffs, China also retaliated with a variety of non-tariff trade barriers. ''Politico'' reported that from the start of 2025 China implemented "an array of bureaucratic blocks and tricky third-party sales deals" halt or curtail the direct imports of major US commodities including beef, poultry, and liquefied natural gas. Retaliatory measures included Chinese government sanctions#Sanctions announced by the Ministry of Commerce (Unreliable Entities List), blacklisting American companies, adding export controls to metals like tungsten, and revoking export licenses for US firms. China decreased imports of American oil by 90%, turning to Canadian oil instead. On March 30, 2025, China, South Korea, and Japan's trade ministers met for the first time in five years to discuss goals for a China–Japan–South Korea Free Trade Agreement, trilateral free trade agreement and enhanced supply-chain cooperation in response to Trump tariffs.

On April 2, the US added a 34% "reciprocal tariff" on most Chinese imports. China matched with a tariff of 34% on American goods, effective April 10, 2025, and suspended negotiations regarding Restrictions on TikTok in the United States, the sale of TikTok. China also began requiring special licenses to export six Rare-earth element, heavy rare-earths, 100% of which were refined in China, and rare-earth magnets, 90% of which are produced in China. The rare earths, difficult to substitute, are critical to a range of high-tech goods, including batteries, weapons, and medical devices. China was slow to develop the export licenses and halted all exports in the meantime.

Trump raised the tariffs by an additional 50%, bringing the baseline tariff on Chinese imports to 104%. China added an additional 50% as well, bringing their baseline tariff on American goods to 84%. The US then raised to 145%, and on April 11, China raised to 125%. The Ministry of Finance (China), Chinese Finance Ministry said China would ignore any further US tariff increases, stating, "Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy."

On April 21, CEOs of major US retailers warned Trump that the escalating trade war would lead to visible price increases and product shortages within two weeks. Trump began to soften his tone. On April 22, Trump stated that tariffs on Chinese imports would "come down substantially, but it won't be zero". Two days later, Chinese Foreign Affairs Ministry spokesman Guo Jiakun said China and the US had "not conducted consultations or negotiations on tariffs." When asked to respond, Trump said the US had been meeting with China as recently as that morning.

By May 2, China had exempted approximately $40 billion worth of American goods from tariffs and the United States had exempted about $102 billion worth of Chinese imports, based on 2024 import volumes. Both countries had expressed a willingness to engage in negotiations aimed at reducing tariffs, but the Chinese government asked the U.S. to eliminate its tariffs first. As previously planned, the U.S. terminated the ''de minimis'' exemption for Chinese imports the same day.

On May 6, officials from the US and China planned to start talks over trade conflicts in Switzerland. He Lifeng, the Vice Premier of the People's Republic of China, Chinese Vice Premier, Scott Bessent, the US Treasury Secretary, and Jamieson Greer, the US Trade Representative, attended the talks.

On May 12, officials from the US and China agreed to drastically reduce for 90 days the tariff rates, from 145% to 30% and 125% to 10% respectively, while further negotiations are held. The US also cut tariffs on Chinese shipments valued below the ''de minimis'' threshold of $800 from 120% to 54%. On June 11, Trump declared the trade deal "done", although China downplayed the deal as a framework representing the "first meeting".

India

In February 2025, Indian Prime Minister Narendra Modi visited the White House to negotiate tariffs and advance a deal aimed at doubling bilateral trade to $500 billion by 2030. India's trade-weighted average tariff was 12%, compared to the United States' 2.2%, leading to Trump repeatedly calling the country "tariff king" and a "big abuser" of trade ties. The US was India's largest export market. Analyses projected reciprocal tariff measures would have significant economic impacts to India. Citigroup, Citi Research estimated that India could lose $7 billion annually. An internal Indian analysis estimated that reciprocal tariffs would affect 87% of its total exports to the US, valued at $66 billion. India estimated increases of 6% to 10% in tariffs on items such as pearls, mineral fuels, and machinery and believed its $11 billion worth of pharmaceutical and automotive exports would see the highest impact.

India took several steps to address trade concerns. In February, it reduced tariffs on motorcycles and whiskey, pledged to review additional tariffs, and offered to increase US energy and defense equipment imports. The following month, Reuters reported that India was negotiating with the US and was open to lowering or eliminating tariffs on 55% of its imports from the US, valued at $23 billion, which were currently subject to tariffs ranging from 5% to 30%. India warned the offer was contingent on relief from reciprocal tariffs and said decisions were not final. On April 2, the US applied a 27% "reciprocal tariff" to India.

By April 6, 2025, India signaled that it would negotiate with the United States and would not seek retaliatory tariffs. There on, India continued with its diplomatic approach, securing a meeting with J.D Vance, and on April 17, 2025, announcing that they were "considering removing import tax on US ethane". On April 29, 2025, the US Treasury Secretary stated that "India would be one of the first trade deals we sign," reaffirming Washington, D.C., Washington's intent to accelerate a resolution and strengthen bilateral trade.

On May 6, 2025, India proposed a "zero-for-zero" tariff on auto parts as a way to kickstart negotiations with the US, following Trump's claim that "trade talks" with India were a first-order priority, back at the end of April.

Israel

On April 2, 2025, Donald Trump imposed a 17% import duty on Israeli goods. On April 3, 2025, Israeli Finance Minister Bezalel Smotrich would meet with another minister to decide a course of action. By April 7, 2025, Israel had offered to remove tariffs on all US goods.

On April 8, 2025, Israeli prime minister Benjamin Netanyahu visited Donald Trump to discuss multiple topics including tariffs. The US president declined to remove the 17% on Israel.

Japan

After receiving a 25% tariff on cars and car parts and a 24% tariff on other goods exported to the United States, Japan's Nikkei 225, Nikkei 225 stock market index fell by 7.8% on April 7, which was the third-largest single-day loss in its history. Since Japan is an export-heavy economy and Japan's large automotive sector depends on the United States for 20% of its total exports, Trump's new tariffs had a sizeable effect on the Japanese economy. Analysts estimate that the tariffs could decrease Japan's GDP by 0.8%.

Prime Minister Shigeru Ishiba said tariffs were "extremely disappointing and regrettable." On April 7, Ishiba talked with Donald Trump by phone, asking the president to reconsider, but could not negotiate any concessions. Trump later wrote "He is sending a top team to negotiate!" on Truth Social.

Various talks were held since then, however on May 5, 2025, the United States announced their refusal of "Japan's full exemption" from not only a 10 percent "reciprocal" tariff but also its country-specific tariff of 24%.

Singapore

On April 2, 2025, Trump imposed a 10% tariff on all goods coming from Singapore. At an address to the Singapore Parliament on April 8, Prime Minister of Singapore Lawrence Wong stated "what the U.S. is doing now is not reform" and "it is rejecting the very system it created." He also stated that "these measures will accelerate the fracturing of the global economy." He also announced the creation of a national task force to support businesses and workers affected by the tariffs.

On April 8, 2025, the Singaporean prime minister's office stated that it would not retaliate on U.S. tariffs. On the same day, a new task force on US tariffs, composed by Singapore's economic agencies, as well as the Singapore Business Federation, Singapore National Employers Federation and the National Trades Union Congress, was announced. The task force held its first meeting on April 16, 2025, and was chaired by Gan Kim Yong alongside other political figures such as Desmond Lee (Singaporean politician), Desmond Lee, Josephine Teo, Tan See Leng, Chee Hong Tat, Lim Ming Yan, Ng Chee Meng and Tan Hee Teck.

South Korea

On April 2, 2025, Trump imposed reciprocal tariffs of 25% on South Korea. With this, the South Korean government announced emergency support for its auto industry. On April 8, 2025, South Korea's acting president, Han Duck-soo called for negotiation rather than retaliation. Trump said that he discussed the tariffs with Han in a phone call and South Korea's finance minister will be meeting with US Trade Representative Jamieson Greer for negotiations. On April 3, Minister of Foreign Affairs Cho Tae-yul met with Marco Rubio and expressed deep concern over the reciprocal tariff measures and asked him to take into account South Korea's investment performance in the United States.

On April 16, 2025, Vietnam's Minister of Foreign Affairs (Vietnam), foreign ministry said that South Korea and Vietnam are seeking to raise bilateral trade to $150 billion by 2030, in a "more balanced and sustainable manner", as they swear co-operation following Trump's tariffs, regardless of "Trump's walk back".

On May 1, 2025, South Korean Industry Ministry officials announced they had traveled to Washington on May 7 for "technical discussions" with U.S. Trade Representative, after Trump called "trade talks" with South Korea a first-order priority.

Taiwan

On April 2, 2025, Donald Trump announced a "reciprocal tariff" of 32% on Taiwanese goods, but excluded semiconductor products, the island's primary exports. Trump had previously criticized Taiwan for gaining an unfair dominance in the semiconductor industry and not spending enough on its own defense. Taiwan's government called the tariffs "unreasonable" but chose not to retaliate, instead offering to increase imports from the US and remove all tariffs on American goods.

The new tariffs exacerbated public concerns over the level of support from the United States. The Kuomintang said that the tariffs were a heavy blow to president Lai Ching-te's policy of depending on the US to counter China and castigated the government's unpreparedness and ineffective response. On April 7, Premier of the Republic of China, Premier Cho Jung-tai convened a meeting at the Executive Yuan with Legislative Yuan, legislative caucus leaders across party lines to discuss the potential impacts of the US tariff hike on Taiwan. During the meeting, Premier Cho expressed appreciation for their participation and emphasized that the government had completed assessments on both macroeconomic and sector-specific levels. He presented a NT$88 billion plan and urged collaboration between the executive and legislative branches to expedite budget review and implementation, stabilize the economy, and support industries through the challenges ahead.

Even after Trump's "walk back", Kao Shien-quey, deputy head of the National Development Council (Taiwan), National Development Council, stated that if the tariffs were ever to be fully re-implemented, Taiwan's manufacturing sector would be likely to see a 5 percent drop in production value.

Vietnam

On February 10, 2025, Trump renewed a 25% tariff on all steel imports originally imposed during his first term and increased aluminum tariffs from 10% to 25%. While other countries had previously received exemptions, Vietnam had not, meaning its steel and aluminum exports were already subject to U.S. tariffs. The hike in aluminum tariffs further strained Vietnamese industries and exporters.

Vietnam's large trade surplus in goods with the US made it a target for reciprocal tariffs. On March 13, 2025, trade minister Nguyễn Hồng Diên arranged a meeting with Lutnick and Greer to try to secure a bilateral trade agreement. He ended up receiving Marc Knapper, a US Extraordinary and Plenipotentiary Ambassador, on March 14. Knapper reassured him that the US tariff measures were not aimed at Vietnam and were meant to promote fair trade and American workers.

On April 2, 2025, Trump presented with a 46% reciprocal tariff on Vietnam, shocking Vietnamese exporters. Vietnamese leaders tried to approach Trump diplomatically to find an agreement to remove the tariffs or to delay them. Vietnam's top leader, General Secretary of the Communist Party of Vietnam, General Secretary Tô Lâm, To Lam, asked Trump to delay the imposition of tariffs for at least 45 days on April 5, with little result. Vietnam then offered to eradicate all US import tariffs, but Peter Navarro shot down the deal, saying "it's the non-tariff cheating that matters". The Ho Chi Minh City Stock Exchange, VN Index fell by 7% after the announcement of the tariffs, practically the biggest Stock market crash, crash ever since the establishment of the Vietnamese stock market.

On April 15, 2025, General Secretary of the Chinese Communist Party Xi Jinping on State visits by Xi Jinping to Vietnam, Malaysia and Cambodia, a visit to Hanoi claimed that "China's mega market is always open to Vietnam" and urged Vietnam to resist "U.S unilateral bullying" and uphold free and open trade. Trump responded, "That's a lovely meeting. Meeting like, trying to figure out, 'How do we screw the United States of America?'".

On April 16, 2025, Vietnam's foreign ministry said that South Korea and Vietnam are seeking to raise bilateral trade to $150 billion by 2030, in a "more balanced and sustainable manner", as they swear cooperation following Trump's tariffs, regardless of "Trump's walk back". Groundbreaking began on a $1.5 billion previously announced Trump Organization golf resort near Hanoi.

The first round of negotiations occurred on May 7, whilst a second round of negotiation took place on May 19, led by Nguyen Hong Dien.

Africa

Nigeria

During Trump's first term, Nigeria continued to benefit from the African Growth and Opportunity Act, a US trade initiative established in 2000 to improve economic relations with Sub-Saharan Africa, Sub-Saharan African countries by providing duty-free access to the US market for eligible nations. However, analysts were quick to notice that Nigeria was one of 48 nations with whom the United States maintained a trade imbalance. In 2024, Nigeria exported $5.29 billion in commodities to the United States while receiving $3.88 billion, resulting in a $1.4 billion trade surplus for Nigeria, making it a likely target of Trump's renewed foreign tariff policies.

On April 2, Trump announced a 14% tariff on Nigerian goods. The Nigerian government avoided retaliation. Instead, Trade Minister Jumoke Oduwole said Nigeria would contact the WTO to find a mutually beneficial solution. Despite pledging not to retaliate, the minister did highlight the risks for AGOA and the Nigerian oil industry, whilst also stating this development had the chance to boost Nigeria's non-oil exports as well as meeting global standards and improving market acceptance into more economies across the globe. She also emphasized the urgent need to enhance intra-African trade through the African Continental Free Trade Area (AfCFTA). Since Nigeria relies on crude exports for 90% of its foreign exchange, immediate consequences were apparent with Central Bank of Nigeria, Nigeria's central bank selling nearly $200 million to support the Nigerian naira, naira currency.

On April 12, 2025, the Federal Government set up a subcommittee to assess the direct and indirect impact of the recent trade tariffs announced by the United States on Nigeria's economy. On this regard, on April 16, Manufacturers Association of Nigeria (MAN) said the 14 percent tariff imposed on Nigerian exports to the United States of America.

South Africa

After Trump announced a 25% tariff on all imported steel and aluminum, major exporters in South Africa were palpable by the onset tariffs, leading the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) condemning the U.S. tariff hike and warning of negative impacts on local manufacturing, as well as calling on the South African government to take immediate action.

Trump imposed reciprocal tariffs of 31% on South Africa on April 2, 2025. This move, according to the government of South Africa, effectively nullified the benefits African countries enjoy under U.S. trade initiative the African Growth and Opportunity Act (AGOA). On April 4, 2025, South Africa's government announced that it would not retaliate and would instead negotiate exemptions.

After the reciprocal tariffs were announced, Parks Tau, Trade and Industry Minister Parks Tau stated that South Africa would start planning to diversify its export markets, targeting regions in Asia, Europe, the Middle East, and within Africa. Another immediate consequence was the postponing of the sale of gems from Petra Diamonds' Cullinan, South Africa, Cullinan Mine, due to uncertainty caused by the tariffs.

Zimbabwe

On April 2, 2025, Trump imposed 18% tariffs on Zimbabwe as part of its "reciprocal tariffs" policy. On April 6, 2025, Zimbabwe became the first country to scrap tariffs on all US goods. The president of Zimbabwe, Emmerson Mnangagwa, has stated that the move was made to foster a positive relationship with Donald Trump's government.

Europe

European Union

Before his second inauguration, Trump threatened to impose tariffs on the European Union (EU) unless it reduced its trade surplus with the US by increasing imports of American cars, agricultural products, and oil and gas. The European Commission pointed out that while the US ran a trade deficit with the EU in goods, it was offset by a trade surplus in services.
On February 2, 2025, Trump told reporters he planned to impose tariffs on the European Union "pretty soon". Some EU leaders threatened immediate retaliation while others expressed concerns about 2021–2023 inflation surge, reigniting global inflation. "We have to do everything to avoid this totally unnecessary and stupid tariff war," said Polish Prime Minister Donald Tusk. On February 4, 2025, EU trade ministers met in Warsaw to discuss Trump's threats. On February 7, the EU proposed lowering tariffs on car imports from 10% to closer to the US' 2.5% rate and to increase purchases of American liquefied natural gas and military equipment. French President Emmanuel Macron met with Trump on February 25 and encouraged him to concentrate on China instead of initiating a trade war with the EU.

On March 12, Donald Trump claimed during his meeting with Taoiseach Micheál Martin at the White House that Ireland was taking advantage of America. He also referred to the "tremendous" trade surplus that Ireland had with the United States.

After Trump's global steel and aluminum tariffs took effect on the same day, the EU announced a two-phase retaliatory plan targeting €26 billion in US imports, set to begin April 1. Phase one reinstated tariffs on iconic American products, such as bourbon whiskey, originally imposed during Trump's first term tariffs and suspended in 2023 after negotiations with President Joe Biden. Phase two would impose tariffs on an additional €18 billion in U.S. industrial and agricultural goods. Trump condemned the EU's planned 50% whiskey tariff and threatened 200% tariffs on EU alcohol in response. The EU postponed retaliation to mid-April, and ultimately dropped all alcohol tariffs after lobbying from Ireland, Italy, and France, major exporters of wine and spirits.

On March 27, 2025, the United States imposed a 25% tariff on all car imports, significantly affecting Germany, the world's largest automobile exporter. On April 2, Trump announced a 20% tariff on all European Union imports, effective April 9, as part of his "reciprocal tariff" policy. In response, EU leaders offered the United States a "zero-for-zero" tariff agreement on industrial goods, such as automobiles, pharmaceuticals, and machinery, on April 7. A similar deal had nearly been reached during negotiations over the proposed Transatlantic Trade and Investment Partnership, which Trump halted during his first term. At the time, the EU's average tariff on non-agricultural goods stood at 1.6%.On April 9, the EU approved a reduced package of 25% retaliatory tariffs on €21 billion worth of US imports, set to take effect on April 15. The targeted goods were selected to be easily sourced from alternative suppliers, with some measures strategically aimed at US Red states and blue states, red states. The only dissenting EU member was Hungary, whose prime minister, Viktor Orbán, is one of Trump's strongest supporters. However, Trump delayed the implementation of certain tariffs for 90 days, reducing the baseline rate on EU imports from 20% to 10%. In response, the EU suspended its retaliatory measures for the same period.
European Commission President Ursula von der Leyen warned that if negotiations failed by the end of the 90-day window, the EU would initiate what she described as "EU trade bazooka measures." She indicated that further countermeasures would target the United States's substantial services surplus with the EU. Von der Leyen also stated that the EU would not tolerate the redirection of Chinese exports hit by US tariffs into the European market and suggested plans to implement regulatory measures to limit such imports. Italian PM Giorgia Meloni visited Trump at the White House on April 17, aiming to convince him to accept the EU's "zero-for-zero" tariff offer for industrial goods.

On May 5, 2025, following Trump's 100% tariff on foreign-made films, Europe announced that it would not impose counter-tariffs on Hollywood films. On May 8, the EU proposed retaliatory tariffs on nearly €100 billion of the U.S. imports, including aircraft, passenger cars, medical devices, chemicals and plastics, etc.

On May 12, Trump, following trade talks with China in Switzerland, described the EU as "nastier than China", adding that the union would "come down a lot." and that the U.S. had "all the cards", in remarks similar to what was stated during the 2025 Trump–Zelenskyy Oval Office meeting regarding Ukraine.

On May 15, EU commission official Matthias Jorgensen, Matthias Jørgensen said that it was "very possible" that the EU and the US would not "get rid of all the tariffs", in which case, he stated, that the EU "might have to rebalance on" its "side".

On May 23, after complaining that trade negotiations have stalled, Trump proposed a "straight 50% Tariff on the European Union" starting from June 1. The Stoxx Europe 600 index fell 1.7 per cent.

On May 25, only two days after proposing a 50% tariff on all EU goods, Trump announced that the tariff would be delayed to July 9, after a call with Ursula von der Leyen.

Russia and Belarus

Russia joined the World Trade Organization in 2012, requiring all other members to grant it Most favoured nation, most favored nation (MFN) tariff rates.B. Hoekman, ''The WTO: Functions and Basic Principles'', 42 Following the Russian invasion of Ukraine in 2022, the G7 countries and their allies moved to revoke MFN status from Russia and block Belarus from joining the WTO. After the United States congress voted to sever normal trade relations with Russia and Belarus, the countries became subject to "Column 2" rates in the Harmonized Tariff Schedule of the United States. Column 2 rates, as created by the Smoot–Hawley Tariff Act, are significantly higher than normal and average about 20% overall. President Joe Biden further increased rates on a variety of Russian goods in February 2023. Russia added the US to their "unfriendly countries list" in 2021 and imposed countersanctions in response to US measures.

Trump did not include Russia or Belarus in his "reciprocal tariff" policy announced April 2, 2025. The White House explained that existing sanctions on the country had "already rendered trade between the two countries as zero." US trade with Russia in 2024 was estimated at $3.5 billion, a tenth of the $35 billion from 2021 before it invaded Ukraine. In an interview with Izvestia on April 9, Deputy Prime Minister Alexei Overchuk reiterated that that Russia had no significant trade with the US.

Trump threatened "secondary sanctions" on imports from countries buying Russian oil, saying, "That would be that if you buy oil from Russia, you can't do business in the United States. There will be a 25 percent tariff on all oil, a 25 to 50-point tariff on all oil."

On April 1, 2025, Senator Lindsey Graham introduced S. 1241, the Sanctioning Russia Act, a bipartisan U.S. Senate bill to impose comprehensive sanctions and trade restrictions on the Russian Federation if it refuses to negotiate peace with Ukraine, violates a peace agreement, or launches a new military invasion. The bill mandates sanctions on Russian officials, financial institutions, state-affiliated entities, and energy sectors; bans U.S. investments in Russia; blocks Russian access to U.S. markets and financial systems; imposes tariffs of at least 500% on Russian imports and a "secondary tariff" of 500% on countries importing Russian oil, gas, or uranium. The bill also includes provisions for cutting off Russian entities from international financial messaging services and prohibits uranium imports from Russia.

United Kingdom

The United States ran a trade surplus with the United Kingdom in 2024 and assigned the UK its lowest "reciprocal tariff" rate of 10%. However, the US was the UK's largest export market for cars and second largest for steel products, and the UK was hit hard by Trump's 25% tariffs on these sectors.

In March 2025, the UK chose not to retaliate against the US metal tariffs. Chancellor Rachel Reeves of the Labour Party (UK), Labour Party said there were ongoing discussions to reduce the UK's Digital Services Tax (DST) to avoid further trade friction. Introduced in 2020, the UK DST levies a 2% tax on large digital firms, primarily impacting American tech companies and generating approximately £800 million annually. The Liberal Democrats (UK), Liberal Democrats criticized the proposal, describing it as a "tax handout to Elon Musk, Zuckerberg, and other US tech barons," and advocated for raising the rate to 6% instead.

Prior to the reciprocal tariff announcement, the UK submitted a draft proposal offering to lower its DST in exchange for reduced US tariffs on steel, aluminum, and cars, but did not secure a deal. The government began researching retaliatory tariffs and solicited input from British businesses on the least domestically harmful options.

On April 15, 2025, Vice President JD Vance said there was a "good chance" a US–UK trade deal could be reached. However, by April 29, US officials reportedly viewed talks with the UK as a secondary priority. On May 5, 2025, President Trump threatened to impose 100% tariffs on foreign-made films, posing a serious threat to the UK's film industry. Prime minister Keir Starmer faced renewed pressure to negotiate.

On May 8, Trump announced he had reached the first trade deal of his second administration with the UK. Under the framework, the US would eliminate tariffs on British airplane parts and metals up to a quota and reduce tariffs on 100,000 cars from 25% to 10%. In return, the UK would eliminate tariffs on US Ethanol fuel, ethanol and allow up to 13,000 metric tons of US beef—up from a previous cap of 1,000 tons at a 20% tariff. The deal did not alter the UK's food safety standards, leaving Growth hormone#Agricultural use, hormone-treated US beef ineligible for import, and it did not modify the UK's DST or 10% tariff on American cars.

While US Trade Representative Jamieson Greer said other countries should consider the framework as a model and that it was "the exact type of deal we should be making", analysts described the deal as a "very small win" that kept the 10% minimum tariff largely in place. Conservative Party (UK), Conservative Party leader Kemi Badenoch described it as "better than nothing but it's not much," criticizing the Labour government for settling rather than pursuing a broader free trade agreement. US automakers criticized the deal for making it cheaper to import a car from the UK than one of their cars assembled in Mexico or Canada using US parts. The deal was finalized at the 51st G7 summit.

Norway

On April 24, 2025, Norwegian Prime Minister Jonas Gahr Støre and Finance Minister Jens Stoltenberg convened with U.S. President Donald Trump at the White House to engage in discussions concerning trade tariffs and the ongoing conflict in Ukraine.

North America

El Salvador

On April 2, 2025, Trump imposed reciprocal tariffs of 10% on El Salvador. Two days later, El Salvadoran president, Nayib Bukele, hailed the move as a great idea, stating that long-term thinking was better than short term thinking.

Oceania

Australia

On February 4, 2025, Jim Chalmers, Treasurer Jim Chalmers addressed concerns regarding potential U.S. tariffs on Australian imports, mentioning that whilst he did not rule out the possibility of imposing counter-tariffs if Trump targeted Australia, he preferred to avoid retaliatory measures.

After the announcement of a 25% tariff on steel and aluminum, Anthony Albanese, Prime Minister Anthony Albanese engaged in discussions with Trump to achieve some kind of exemption, which ended up with a statement from the White House that expressed concerns about Australia allegedly disregarding past commitments to restrain aluminum exports. Despite Albanese's efforts, the U.S. officially imposed a 25% tariff on Australian steel and aluminum, leading to him calling it an "unjustified" action, however confirming that Australia would not retaliate. Despite this, Trade Minister Don Farrell continuously attempted to achieve some kind of exemption through negotiations, but to no avail.

Trump imposed a 10% tariff on Australia as part of the "reciprocal tariffs" on April 2, 2025. On April 3, 2025, Albanese stated that he would negotiate with the United States to remove tariffs and would not impose reciprocal tariffs as he believed that trade wars are a race to the bottom. He released a five-point strategy to mitigate the damage to impacted industries. The strategy includes a $50 million assistance package to help industries like beef exports find new customers. On April 9, 2025, Australia declined China's ambassador to Australia Xiao Qian (diplomat), Xiao Qian offer to 'join hands' on Trump's tariffs.

After Trump announced a 100 percent tariff on films produced outside the United States, as early as May 6, 2025, the Australian government called the tariffs "unjustified", leading to considerations to re-open "trade talks" with the EU, which had collapsed in 2023 when the sides could not reach an agreement on Australian agricultural exporters' access to the European market.

Fiji

On February 4, 2025, Ministry of Commerce, Trade, Tourism and Transport (Fiji), Fiji's Minister for Trade, Manoa Kamikamica, said that, while it was premature to determine the effects on Fiji as a result of the 25% tariffs imposed on Canada, Mexico, and China, there were concerns that this was the first step toward a global trade war that would also engulf Fiji, fearing that Fiji could become one of Trump's future targets. However, on February 19, 2025, Acting Prime Minister and Minister for Finance Biman Prasad, Professor Biman Prasad suggested that the tariffs on Canada, Mexico, and China will not affect Fiji, and might instead bring benefits to Fiji, saying that "countries like Fiji could see cheaper goods flowing through the Pacific as these nations look to offload excess capacity". Prasad added three days later that Fiji's economic fundamentals had improved during the last two years and affirmed that the administration did not see any immediate risks that may disrupt its economic prospects. Even so, Fijian analysts continued to speculate that the increased price of imported aluminum and steel could impact the Fijian economy.

On April 2, Trump announced "reciprocal tariffs" on Fiji amounting to 32%, despite the Fijian government imposing less than 2% import duties on average on all U.S. imports. Sitiveni Rabuka, Fijian Prime Minister Sitiveni Rabuka admitted that his government was not ready for Trump's 'reciprocal tariffs' and was caught by surprise. Regarding his possible plans, he said that, "The world is bigger than the United States" and that Fiji would have to look at new sources of imports and new markets for their exports. The immediate effects of such tariffs hit products such as Fiji Water, kava, dalo and turmeric, which are amongst the biggest exported products from Fiji towards the USA. Fiji's Finance Minister said that the 32 percent tariff by the Trump Administration – the highest in the Pacific – is unfair, while a government spokesperson said he did not understand how the region threatens the American economy. On April 10, 2025, following Trump's "walk back", Deputy Prime Minister and Minister for Trade Kamikamica announced that a meeting with United States Trade Representatives was set to happen the following week.

On May 11, 2025, Fiji was confirmed to be amongst the list of nations that the U.S. would engage talks regarding tariffs with. Deputy Prime Minister and Minister for Trade, Manoa Kamikamica stated that Fiji was committed to working with the USA on the tariff negotiations and achieve a win-win outcome for both countries.

South America

Brazil

The US ran a trade surplus of $253 million with Brazil in 2024. Nonetheless, Trump criticized the country for being a "tremendous tariff maker" and pledged to impose tariffs on its exports. Brazilian president Luiz Inácio Lula da Silva vowed to reciprocate. However, following Trump's 25% tariffs on steel and aluminum, Brazilian Institutional Affairs Minister Alexandre Padilha said that Brazil would not retaliate.

On April 2, 2025, Donald Trump imposed the base 10% tariff on Brazil. The reaction from Brazilian exporters was mixed. Coffee exporters saw an opportunity to send more Coffea canephora, robusta beans to the US due to international rivals being initially hit with heavier charges, while other companies, such as Embraer, worried over rising complexity and costs for their US customers.

On April 3, 2025, Brazil's government stated that it would explore options including involving the World Trade Organization. The Brazilian National Congress passed a "Trade Reciprocity Law", enabling the government to respond to potential unilateral trade measures imposed against Brazilian goods and services. By May 2025, according to statements released by Ministry of finance, Brazilian Finance Minister Fernando Haddad, Brazil and the United States were negotiating the terms of an understanding on tariffs.

Colombia

On January 26, 2025, Colombia–United States relations#21st century, a dispute arose between Colombia and the US after Colombian president Gustavo Petro refused to allow the landing of two US military aircraft carrying Mass deportation of illegal immigrants in the second presidency of Donald Trump, deported Colombian nationals. Petro called the treatment of deportees on military flights undignified and said he would accept deportation flights on civilian planes. In response, Trump ordered retaliation against Colombia and its officials, including 25 percent tariffs that would increase to 50 percent in one week if Petro did not reverse his position. Petro responded by ordering a 25 percent tariff on the US that would also increase to 50 percent. Hours later, the US said Colombia had agreed to "unrestricted acceptance" of deportees, including on military aircraft. Colombia said it would "continue to receive" deported Colombians and would guarantee them "dignified conditions".

Other countries

BRICS

In November 2024 and again in January 2025, Trump attempted to threaten BRICS countries saying they would face 100% tariffs if they attempted to replace the US dollar as a reserve currency.

Eurasian Economic Union

As of April 3, 2025, according to Kommersant's source in the Eurasian Economic Commission, which regulates the import duties of the Eurasian Economic Union countries, they are unlikely to change – this is a well-established opinion. "The Union as a whole is not significantly affected by the tariff increase, most countries will be subject to a duty of 10%, which in the new realities can be considered the most favourable treatment". At the same time, Russia itself has sufficient freedom to impose unilateral restrictive measures, which often happened after 2022. If Russia finds itself hit by other countries raising duties in response to a US import tariff hike, it will still have the option to respond accordingly.

Impacts

Markets

Immediately after Trump's announcement on April 2, markets sunk sharply lower. In Japanese markets, the Nikkei 225 dropped 2.8% while the TOPIX dropped 3.1%. In Europe, the FTSE 100 was down 1.6%, while the CAC 40 in Paris fell 3.3%. The German DAX also fell 3.1%. In the United States, stock Futures contract, futures tied to the S&P 500 fell 3.9%. Dow Jones Industrial Average futures fell 2.7%, and Nasdaq 100 futures fell 4.7%.

The S&P 500 Index fell over 274 points or 4.88%, the List of largest daily changes in the S&P 500 Index, second largest daily point loss ever, and the Nasdaq Composite fell over 1,050 points or 5.97%, the List of largest daily changes in the Nasdaq Composite, largest point loss in its history. The Dow Jones Industrial Average fell 1,679.39 points, or 3.98%, then the List of largest daily changes in the Dow Jones Industrial Average, fifth-largest point loss in its history. On April 3, the Russell 2000 entered the bear market territory, falling over 20% from a recent high, after falling 134.82 points or 6.59%. The Nasdaq Composite did the same on April 4. On April 7, early trading in Japan triggered the Trading curb, circuit breaker on futures trading after an 8.03% fall.

Market turbulence continued until April 9, when Trump announced the first of several reductions in tariffs. Following further walk backs and tone shifts, the S&P 500 erased all losses by May 2, 2025, and turned positive for the year by May 13, 2025.

United States

Economic impacts

Although Trump's first-term economic policy featured lower and more targeted tariffs with many exceptions, Trump promised higher rates, broader impacts, and few exceptions in his second term. According to the Tax Foundation, the first Trump administration imposed new tariffs on approximately $380 billion worth of imports. Comparatively, the second Trump administration was expected to impact more than $1.4 trillion of imports by April 2025.

At the start of his second term, confusion over rapidly fluctuating tariff levels and other economic policies created significant uncertainty for businesses and economists, creating a chaotic environment for investment, business planning, and pricing, and posing serious concerns for consumers as well. US GDP grew by 2.8% in 2024, the year before Trump's inauguration. In March 2025, the Federal Reserve lowered its 2025 growth forecast from 2.1% to 1.7%, while the OECD projected a decline to 2.2% in 2025 and 1.6% in 2026. The Federal Reserve also increased average inflation expectations from 2.5% to 2.7%. The US dollar value also decreased massively following the announcement compared to other currencies. Goldman Sachs estimated that tariffs imposed by Trump would remove up to 500,000 jobs in the US; thousands of layoffs had already taken place as of April 2025. By April 4, JPMorgan Chase forecasted a recession within the year.

As noted in April 2025 by the editor of ''The Economist'', Trump's imposition of sudden and extreme tariffs fails to account for the fact that US-produced goods "[have] long supply chains, where companies get supplies from many different countries, and where the US has specialized in services and higher Value added, value-add manufacturers." Furthermore, if the end goal is to rebuild domestic manufacturing by implementing permanently high tariffs, not only would parts and materials likely become difficult or impossible to acquire, but, seeing as the United States only accounts for 15% of global trade, the international system is capable of carrying on with a reduced US role—a scenario which may well prove detrimental to the U.S. economy.

Early April 2025 saw a 64% drop in ocean container bookings from China to the US, a collapse of trade with the potential to cause retail shortages within a month or two. Supply chain problems also loom for medicines such as the blood thinner heparin. Medical device makers have also raised alarm over potential disruptions to their integrated global supply chains. Surgical tools, MRIs, ventilators, pumps and other equipment are likely to rise in price. Large consumer goods groups expressed pessimism about future earnings, with PepsiCo, Pepsico and Procter & Gamble lowering their financial outlooks for the year while Unilever and Nestlé said their consumers would face higher prices. Walmart and Target executives warned Trump of the impact tariffs would have on their business in an April 21 White House meeting. Norfolk Southern Railway, Norfolk Southern and Boeing warned that tariffs would impact their supply chains, and AT&T and Verizon said they would lead to inflation in communications technology goods such as routers and handsets. Charity shop, Thrift retailers reported an improved economic outlook as a result of tariff pressures on other retailers. According to U.S. Senate Minority Leader Chuck Schumer, American households will spend about $4,000 more annually because of the tariffs imposed by Trump. Schumer's figure is roughly in line with four independent estimates identified by PolitiFact.

Following Trump's global tariff announcements and worldwide trade war on April 3, the Yale Budget Lab calculated the average effective US tariff to be 22%, up from 11% before the announcement and at the highest level since 1909. Inflation Insights stated the weighted average tariff rate was set to rise to around 25% to 30%, up from 2% in the prior year. The Cato Institute and other economists stated that the tariffs would "approach levels not seen since the Smoot-Hawley Tariff Act of 1930", which ''The Wall Street Journal'' put at roughly 20% and lasted until the General Agreement on Tariffs and Trade in 1947. After adjusting for inflation, the tariffs amounted to the largest tax hike in U.S. history and triple the tax increase to fight World War II.

Economist Michael Hudson (economist), Michael Hudson has argued that the tariffs have the deglobalization#Risks of deglobalization, potential to disrupt the global economy by disrupting the balance of payments between the United States and its foreign debtors. By reducing the export trade between the United States and countries targeted by the tariffs and raising the cost of dollar-denominated goods, the US makes it more difficult for those countries to pay their dollar debts. Hudson believes this could cause a debt crisis, and compares it to the historical examples of the Latin American debt crisis and the inter-allied repayment of loans during the world wars.

Political and legal challenges

Senators Chuck Grassley and Maria Cantwell introduced the bipartisan Trade Review Act, Trade Review Act of 2025, proposing amendments to the law aimed at separation of powers and closing legal loopholes. However, the law has not yet reached a consensus. Senate Majority Leader John Thune referred dismissively, "I don't think that has a future." Senator Elizabeth Warren, calling it "a moment of truth for Republicans" to overturn the emergency declaration that President Trump used to justify tariffs impacting the families, businesses, and farmers they represent. A similar bill was introduced in the House of Representatives by Rep. Don Bacon, who stated, "The Constitution clearly gives the authority for taxes and tariffs to Congress. Our Founders created checks and balances for a reason," urging Congress to reclaim its responsibility.

Lawmakers were also frustrated with how the world learned of Trump's decisions—through a social media platform operated by Trump Media & Technology Group, Trump's company, instead of through federal administration officials. Democratic Senator Adam Schiff called on Congress to investigate whether Trump had engaged in suspicious insider trading or market manipulation when he abruptly announced and paused the tariffs. The media described the US economy, the government's handling of the jobs and retirement savings of millions of Americans, and the US's standing in global security, as having encountered an unprecedented crisis of trust because of the Trump administration's unrestrained behavior.

Companies, business groups, trade associations, lawyers at home and abroad, and foreign governments filed formal complaints challenging the legality of the White House tariff measures. On April 16, 2025, California Governor Gavin Newsom sued Trump over tariffs in an aggressive move to end the president's stranglehold on global commerce (3:25-cv-03372). Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York (state), New York, Oregon and Vermont also sued Trump Administration over tariffs on April 23 (1:25-cv-00077).

On April 14, 2025, a public interest law firm, Liberty Justice Center, filed suit against the Trump administration over Executive Order 14257 on behalf of a group of five small businesses in the case ''V.O.S. Selections, Inc. v. Trump (1:25-cv-00066).'' The firm requested a Temporary Restraining Order (TRO), which was denied by the United States Court of International Trade. The Court set a briefing schedule and hearing to rule on plaintiff's motion for a preliminary injunction to enjoin the implementation of the "Liberation Day" tariffs. The government's response brief was filed on April 29 and the plaintiff's reply is due on May 6, 2025. The hearing is scheduled for May 13, 2025. James Fanelli reported with ''The Wall Street Journal'' that, "Other challenges have been filed in the court and in federal district courts around the country, but the ''V.O.S.'' case is front and center so far."

On May 28, the United States Court of International Trade ruled that the tariffs Trump imposed globally overstepped presidential powers, and gave the administration a deadline of 10 days to end them. The decision does not affect tariffs imposed by other American authorities such as those on steel, aluminum and cars, and does not block potential tariffs on pharmaceuticals, semiconductors and other products, either.

A closely related area of legal scrutiny arises from the broader constitutional and statutory questions surrounding the use of the International Emergency Economic Powers Act (IEEPA) as a basis for imposing tariffs. While the specific circumstances and plaintiffs differ across ''Webber v. Trump'', ''Princess Awesome & Stonemaier Games v. Customs'', ''Learning Resources v. Trump'', ''Oregon v. Trump'', and ''Emily Ley Paper Inc. v. Trump'', these cases collectively raise common concerns about the scope of presidential authority under IEEPA and its alignment with constitutional principles. Central to each case is the argument that the imposition of tariffs, in the absence of clear congressional authorization, may constitute an overextension of executive power into areas that are traditionally reserved for the legislative branch, particularly in the regulation of commerce and the imposition of tariffs.

A recurring issue in these challenges is the conflict between statutory interpretation and constitutional framework. Plaintiffs consistently argue that IEEPA was not intended to authorize broad-based trade measures without a defined national emergency and that its application in this context raises concerns regarding the separation of powers. Several complaints also invoke the nondelegation doctrine, asserting that the statute, as applied, grants the executive branch an excessively broad scope of discretion without adequate guiding principles. In addition to constitutional claims, the cases highlight the significant economic consequences for states, businesses, and individuals, emphasizing the potential for such executive actions to set a precedent for expansive policymaking beyond the original purpose of emergency economic legislation.

China

Nomura Holdings estimated that eliminating the US ''de minimis'' exemption for Chinese goods "would slow Chinese export growth by 1.3 percentage points and GDP growth by 0.2 point". When the US Congress raised the ''de minimis'' limit from $200 to $800 in 2016, they sparked a surge in US imports of cheap Chinese goods. A 2023 US Select or special committee (United States Congress), House Select Committee report estimated that "nearly half" of all ''de minimis'' shipments originated from China. Chinese e-commerce companies Temu and Shein, estimated to comprise more than 30% of daily ''de minimis'' exemptions to the US, onboarded more sellers with a physical presence in the US and expanded their distribution facilities beyond China, to mitigate the impact of losing the exemption. In response to the threat of tariffs, Chinese e-commerce groups have bought up significant amounts of storage space at warehouses within the US, accounting for a fifth of new leases in the third quarter of 2024. This change in business strategy has in turn boosted the fortunes of Chinese logistics management firms.

On February 7, 2025, Trump suspended closing the exemption for China until the Secretary of Commerce notified him that adequate systems to process and collect tariff revenue were in place. The exemption is expected to be closed again on May 3, 2025.

Other countries

In Singapore, Deputy Prime Minister of Singapore, Deputy Prime Minister and Ministry of Trade and Industry (Singapore), Minister for Trade and Industry Gan Kim Yong, along with Senior Minister Lee Hsien Loong, expressed concerns that the tariffs could affect economic growth and the cost of living. Gan stated in a press briefing that authorities were monitoring the situation and would implement measures if necessary. Analysts in Singapore noted that while the tariffs posed a risk of trade slowdown, they could also make Singapore a more attractive source of imports for American buyers seeking alternatives to higher-taxed suppliers.

In response to Trump's vehicle tariffs, some automobile companies suspended exports to the U.S., including Audi, Jaguar Cars, Jaguar, and Land Rover.

On April 5, 2025, Japanese video game manufacturer Nintendo announced it would delay pre-orders for its upcoming Nintendo Switch 2, Switch 2 console from their initial date of April 9 in the United States, citing economic uncertainty due to the tariffs. However, the console's planned U.S. release date of June 5 remained unchanged.

In January 2025, Trump said that the tariffs on Mexico are intended to reduce the U.S. trade deficit with Mexico and force the country to secure its border with the United States against illegal immigration into the United States, illegal immigration and fentanyl smuggling. The opioid epidemic in the United States, opioid crisis in the United States is largely fueled by drugs smuggled from Mexico; approximately 98% of fentanyl entering the U.S. comes from Mexico. During the first months of 2025, Mexico stepped up its fight against narcotraffic and immigration following Trump's statements on the subject. In particular, Mexico handed over 29 major cartel prisoners to US authorities in February 2025.

In 2025 Canadian federal election, Canada, 2025 Australian federal election, Australia and 2025 Singaporean general election, Singapore where they held their own elections within a week, economic fear by the tariffs caused increase support for their respective incumbent governments among the voters with Canada's and Australia's Opposition Leaders losing their seats and one of two opposition parties in Singapore losing all their seats.

Summary table

See also

* Chicken tax
* Hands Off protests
* List of the largest trading partners of the United States
*
* Smoot–Hawley Tariff Act
* Tariffs in the first Trump administration
* U.S. economic performance by presidential party
* Mar-a-Lago Accord, Donald Trump administration's Mar-a-Lago Accord
* Foreign policy of the second Donald Trump administration
* 2025 United States boycott
* Trump Always Chickens Out

References

External links

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