It all began with a phrase ‘Make America Great Again’ (MAGA), a slogan he carried over from his previous term. When Trump assumed the White House for the second time, many experts had predicted that Trump 2.0 could be a chaos. What started from tariff to Mexico, Canada and China have full blown into global tariff war.

After assuming office in January, President Trump signed the executive order on February, 1, 2025 and imposed 25% tariff on Canada and Mexico and 10% on China which he said will come into effect from February 4.[1] Since then, a series of tariffs have been announced; some successfully negotiated, others fiercely contested and some still under negotiation.

Tariff have emerged as the strongest tool for Trump in advancing his MAGA campaign, as he argues that the tariffs will enhance American economy and restore manufacturing glory once it enjoyed. Trump wants to reduce the trade deficit it has with the countries through tariff.

The Global Tariff Announcement

Right after announcing the 25% tariff on February 3, Trump agreed for 30 days pause on Mexico and Canada citing for concessions for border and crime enforcement. Following up, there have been multiple announcement regarding the tariff raise and exemptions. The real shock came in on April 2 when the White House announced global tariff with 10% baseline in all imports coming into effect from April 5 with reciprocal tariffs on individual countries with higher trade deficits using his International Emergency Economic Powers Act of 1977 (IEEPA) authority.[2]

Again on April 9, Trump suspended the reciprocal tariff for 90 days while keeping 10% blanket tariff in place. While the reciprocal tariff was suspended for the rest of the US trading partners, Trump ramped up the rates for the Chinese imports with 145% from 104%.[3] Soon after, China countered with 84% trade levies[4] on American goods on April 10.

Tariff Offence

While the US and China agreed to temporary lower the tariff for 90 days on May 12 with US slashing additional tariffs to 30% on Chinese imports and China cutting theirs to 10%, the US simultaneously  began imposing heavy reciprocal tariffs on several other trading partners.

In an unexpected turn of events, Trump penalized India with additional 25% tariff on August 6, to the earlier rate of 25%, making it 50% in total, citing New Delhi's Russian oil purchase.[5] Before the announcement it was reported that India and US had five rounds of trade negotiations to which Indian officials seemed positive. In response India condemned this move as "unfair", "unjustified" and "unreasonable" asserting that its Russian oil import is for energy security.[6]

Another country facing highest rate of levies is Brazil with 50%, as Trump claimed the measure was intended to level the trade playing field. However, US is on trade surplus with the largest economy in the Latin America.[7] Therefore it is assumed that, Brazil tariffs are more about politics than trade.

Trump's decision to levy 39% tariff on Switzerland came as a major surprise globally[8], given that US's import form Switzerland are not that significant and  Switzerland known for its neutrality is not embroiled in any geopolitical conflicts.

India and Brazil remains the largest receiver of Trump's tariff rate with 50% followed by Syria 41%, Myanmar 40%, Laos 40%, Switzerland 39% and Canada 35%. India and Brazil accounts for only 2.7% and 1.3% of US imports respectively whereas, Mexico, China and Canada rank as the top three sources, making up to 15.5%, 13.4% and 12.6% of total US imports.

Table shows the list of countries with 25% and more tariff

Source: BBC

The negotiators

Ahead of the August 1 deadline for implementing 10% minimum global tariff several countries worldwide rushed to reach agreement with the US. White House made it clear that 10% will be applicable to those with whom US has trade surplus, while 15% will remain floor for the countries that US has trade deficit. US's major trading partners like EU, Japan, South Korea, and Vietnam emerged as firm negotiators in this trump tariff showdown.

EU made a deal of 15% tariff ceiling on all EU exports "currently subject to reciprocal tariffs", while sectoral tariffs on steel, aluminum, and copper remain 50%.[9] Additionally the EU agreed to buy $750 billion in US energy and make investments worth $600 billion in the US by 2028.[10] However, the deal is criticized by several European leaders as it came with a price that might hurt European economy.

Vietnam is one of those early negotiators finalizing a deal with the US on July 2 for a 20% levy, down from the initial reciprocal tariff of 46% and 40% duty on Chinese products transshipped through Vietnam.[11] In return, Vietnam agreed to have zero tariffs on US imports.

Similarly, US made a deal of 15% with Japan[12] which Trump described as a massive deal, despite his earlier doubt suggesting Japan might not cooperate, even calling the country "Spoiled"[13]. Japan agreed to invest $550 billion in the US with 90% of the profit be retained by the US.[14] However, in a recent development, Japan and the US disagree on the terms of the deal with Tokyo urging Washington to amend what it called an "extremely regrettable" error in the agreement.[15]

Unpredictable policy to hit America

The tariff announcement of White House was no surprise, as it had been reiterated during Trump's campaign that, if elected, he would raise tariff, viewing the prevailing system as unbalanced and unfair to the US in its trade relationships.

Throughout modern history, the US has maintained remarkable consistency in its foreign policies, which has contributed to its reputation as a reliable global partner. However, under Trump's leadership American policies are frequently changing dismantling the foundations of US leadership in the world. President Trump has threatened and pushed away its allies and trade partners with often altering policies and trade arrangements.

The US is eroding its image of stability and predictability and potentially losing trust among its allies especially from geostrategic perspective. The tariffs levied on BRICS members are significantly high suggesting they may be targeting the bloc. As a result BRICS members are regrouping and redefining their relations to fight the heavy tariffs laid upon them.[16]

On the other hand, while tariff would undoubtedly hurt the economy of the exporters and disrupt the global supply chain; many mainstream economists argue that tariffs could also damage the economy of countries imposing them. Trump claims that the US will reap billions from his new tariff policy but at the end, the price is paid by the US companies and customs eventually burdened by the consumers. The debate of free trade vs protectionism is not new, however the economic experts generally agree that free trade has been beneficial for the US.[17] And we all can see that the world has prospered under the more open trading system.

Conclusion

Trump's aggressive tariff strategy has triggered a wave of chaos around the world. Though it is framed as a means to restore American manufacturing strength and balance trade deficits, the move has strained allies and heightened the global economic uncertainty. By disproportionately targeting its allies and key trading partners US risks not only losing them but also a new grouping emerging against the US trade dominance in the world. Additionally, the unpredictability of US policies under Trump's leadership, marked by sudden swings, inconsistent commitments, and transactional negotiations undermines the trust and stability US historically offered to its allies, which could eventually bleed the US economy.

While tariffs may yield short term benefits, experts believe that they may impose higher costs on American businesses and consumers. Though, Trump tariff blitz is considered as political move rather economic, time will tell, if the protectionist measure will work this time for America. This is the same America that has been consistently lobbying for free trade and benefitted to be the largest economy of the world.