Trump's Tariff Policy in 2025: Reshaping Global Trade

Since taking office in January 2025, President Trump's tariff policies have sent shockwaves through the global trade system. His announcement of "Liberation Day" on April 2nd, introducing reciprocal tariffs, signals a dramatic shift in world trade dynamics. This article examines the evolution of the Trump administration's tariff policies from February to early April 2025, their key features, and their impact on markets and economies worldwide.

1. Core Principles of Trump's Second-Term Tariff Policy

Trump's second-term tariff policy maintains the protectionism of his first term while taking a more aggressive stance through official adoption of "tariff reciprocity." The principle of imposing "tariffs equal to or half the level that other countries impose on the US" concretizes Trump's core slogan of "Fair and Reciprocal Trade."

In his "Liberation Day" speech on April 2nd, President Trump announced:

• A minimum 10% base tariff on all imports (effective from midnight April 6)
• "Reciprocal tariffs" on 60+ countries with large trade deficits (effective from 12:01 AM April 9)
• 25% tariff on imported automobiles (effective from midnight April 3)
• Country-specific tariff rates: China 34%, Vietnam 46%, UK 10%, Japan 24%, South Korea 25%, EU 20%, India 26%, Thailand 36%, etc.

Trump explained that the purpose was to "end unilateral economic concessions and make America wealthy again." A White House official emphasized to CNBC that "this is not a negotiation, but a national emergency," suggesting that requests from other countries to avoid tariffs were unlikely to be accepted at this time.

2. Timeline of Tariff Policy Development: February to April

February: Opening Moves

February 1

• Announced 25% tariffs on Canadian and Mexican steel and aluminum
• Justified by national security concerns (particularly border control) and trade imbalance correction
• Canada warned of "immediate retaliation," highlighting North American trade tensions

February 3

• Ontario Governor Doug Ford announced restrictions on US companies bidding for provincial contracts and canceled Starlink contracts
• US-Canada conflict escalated to state/provincial level
• After emergency talks, a one-month delay was agreed, but without substantive resolution

February 10-11

• Expanded steel and aluminum tariffs globally (25% each)
• Cited "global overproduction" as justification, signaling worldwide trade conflicts

February 13

• Officially declared "Reciprocal Trade and Tariff Policy"
• Introduced strategy to impose tariffs equal to those other countries levy on the US
• Added reciprocity framework to existing protectionist measures

February 27

• Expanded China tariffs: additional 10% on top of existing 10% (total 20%)
• Reconfirmed Canada/Mexico tariffs: enforcement to proceed on March 4
• Trade conflicts expanded significantly, centered on China and North America

March: Deepening Conflicts

March 3

• Trump reaffirmed commitment to tariffs, stating they were "proceeding without problems"
• Cited insufficient cooperation from Canada and Mexico on drug and immigration issues

March 4

• Implemented 25% tariffs on Canadian and Mexican products
• Simultaneously enforced additional 10% tariffs on Chinese products (total 20%)
• Markets reacted immediately: global stock declines, Canadian dollar and Mexican peso plummeted
• Canada retaliated with 25% tariffs on US products worth 30 billion Canadian dollars
• Conflict intensified into a pattern of retaliation and counter-retaliation

March 6

• Partial tariff suspension for Canada and Mexico, citing progress on border security
• Tensions continued as this was only a "partial suspension," not a complete withdrawal

March 10

• Ontario Governor announced 25% surcharge on electricity exported to the US
• Conflict spread beyond national level to regional units

March 11

• Trump suggested possibility of additional 25% tariffs (total 50%)
• Ontario Governor temporarily suspended electricity surcharge plan after meeting with US Commerce Secretary
• White House briefly postponed 50% tariff implementation
• Negotiation signals detected, but tension remained high

March 12

• 25% tariffs on steel and aluminum uniformly implemented worldwide
• EU and Canada immediately declared retaliatory tariffs
• Global trade order effectively destabilized, market volatility increased

March 13

• Canada expanded retaliatory tariff items to 539 products
• North American trade conflict intensified into comprehensive tariff warfare

March 19

• Economic uncertainty from trade policies highlighted
• Experts warned of long-term growth impediments, consumer price increases, rising unemployment

March 26

• Announced 25% tariffs on imported automobiles and parts (to be implemented April 3)
• Auto industry impact concerns: finished vehicle price increases ($5,000-$10,000), parts supply chain disruption

April: "Liberation Day" and Full Reciprocal Tariff Implementation

April 2 - "Liberation Day"

• Trump officially declared implementation of "reciprocal tariffs"
• US markets immediately dropped: S&P 500 futures fell 2.2%, Nasdaq-100 tracking ETF declined 3.3%, investor anxiety visible
• Reciprocal tariff rates announced for major trading partners: China (34%), Vietnam (46%), South Korea (25%), etc.

April 3

• Implemented 25% tariff on imported automobiles
• Price increases inevitable for both domestic and foreign brands, likely leading to reduced consumption and increased costs across the auto industry

Bloomberg reported that President Trump was finalizing adjustments to tariff rates and scope. Options under consideration included tiered tariffs based on country-specific trade barriers, customized reciprocal tariffs, and single tariffs. While the White House spokesperson confirmed tariffs would take effect immediately upon announcement, they left open the possibility of rate adjustments through further negotiations.

3. Policy Details and Economic Impact

Tariff Coverage and Exceptions

• Steel and aluminum items under existing tariffs are maintained under previous regulations, not included in reciprocal tariffs
• Automobiles face a new special tariff (25%), significantly impacting both US and foreign auto industries
• Canada and Mexico remain under previously imposed 25% tariffs, excluded from the new tariff system

Global Supply Chain Disruption

• Intermediate goods like steel, aluminum, and auto parts are widely used across manufacturing, potentially causing cascading impacts across industries
• Canada and Mexico's significant role in North American auto supply chains means the USMCA (formerly NAFTA) framework faces serious challenges

Retaliatory Tariff Proliferation

• Canada, Mexico, EU, and China have announced or are considering countermeasures
• Simultaneous reciprocal tariffs from major trading partners could accelerate "supply chain fragmentation" globally

Consumer Prices and Economic Slowdown

• Rising import prices expected to increase consumer prices (inflationary pressure) and corporate costs
• Goldman Sachs lowered US GDP growth forecast from 2.0% to 1.5%, mentioning unemployment could exceed 7%, indicating increased economic slowdown risk

4. International Reactions and Outlook

European Union

• Considering retaliatory tariffs and WTO complaints in response to high US tariffs on key exports (automobiles, steel, aluminum)
• Viewing this as undermining the multilateral trade system (WTO) and likely to focus on strengthening trade blocs or regional agreements (e.g., EU-Asia FTA)

Canada and Mexico

• Deepening conflict with the US over border and drug issues
• Continuing unstable negotiation phase with alternating tariff suspensions and retaliations

Asian Nations

• High tariff rates applied: South Korea (25%), Japan (24%), Vietnam (46%), Thailand (36%), India (26%)
• Industries with significant US export dependency (automobiles, steel, electronics) particularly vulnerable
• Governments likely to accelerate efforts to reduce US market dependence and find alternative export markets

China

• Strongly objecting to the announced 34% reciprocal tariff on top of existing 20% tariffs, using terms like "trade war resumption"
• Potential for heightened US-China tensions as China's Manufacturing 2025 policy collides with US protectionism beyond 2025

5. Turning Point in Global Trade Order

Rapid Shift from Free Trade to Protectionism

• Post-WWII WTO-centered free trade system significantly destabilized by reciprocal tariffs and trade bloc formation
• Introduction of the largest new import taxes in US history under the banner of "Make America Wealthy Again"

Supply Chain Restructuring and Cost Increases

• Investment and production structures changing alongside tariffs, forcing companies to seek new production bases
• Potentially leading to long-term inefficiencies and consumer price increases

Political and Diplomatic Repercussions

• America First policies weakening alliance cooperation structures and promoting formation of new trade alliances or regional economic zones
• Traditional allies like Canada and EU potentially pursuing alternative trade agreements despite historical friendships

Market and Economic Uncertainty

• Investment sentiment deterioration, capital market volatility expansion, and safe-asset preference (gold price increases) already evident
• Businesses facing both short-term cost increases and long-term competitiveness challenges

6. Conclusion: The Beginning of Trade Wars

The Trump administration's tariff policies rapidly expanded from steel and aluminum tariffs in early February to border issues with Canada and Mexico, additional Chinese tariffs, and automobile tariffs by March. The reciprocal tariff policy formalized on April 2nd's "Liberation Day" has further complicated trade conflicts between the US and major trading partners.

Within the US, while some voices anticipate manufacturing protection and job creation, others simultaneously point to negative impacts from consumer price increases and economic slowdown. Internationally, countries are pursuing retaliatory tariffs and trade diversification, accelerating efforts to reduce dependence on the US market. Globally, the free trade system is being shaken as regional and bilateral agreements gain new prominence.

Ultimately, these tariff measures potentially hold structural, transformative power over the entire global trade order—far beyond simply raising or lowering numerical tariff rates. Each country's responses and negotiations following April will be crucial variables determining the direction of the international economy. Businesses and investors urgently need to consider both short and long-term risk management strategies and alternative market development.