Trump's Tariffs

Writer: TJ Patel

In recent months, Trump has brought tariffs back into the spotlight with a series of bold new trade policies. While the word “tariff” might sound technical or distant, these decisions are already making waves, affecting jobs, prices, and international relationships. But what exactly is going on, and why does it matter? This article breaks down what Trump’s tariffs are, who they affect, and why they could have far-reaching consequences beyond American borders.

What are Import Tariffs, and Why Are They Used?

A tariff is a tax imposed by the government on imported goods and services. The tariff is paid by the importer, which is usually a company, but the cost is often passed down through businesses to the final consumer. For example, if the UK imposed a 10% import tariff on steel, a fridge manufacturer in the UK will have to pay the 10% tax in order to purchase the steel, consequently they will increase the price of the fridges they sell in order to still make a profit. So, ultimately this is why tariffs often lead to higher prices for consumers. The idea is to make imported goods and services more expensive, leading people and businesses to buy from domestic producers instead. Governments often use tariffs to protect domestic industries, respond to unfair trade practices, or try to reduce how much they rely on other countries.

What Has Trump Done Recently?

Since Trumps return to office in 2025, he has moved quickly to reshape America’s trade policies.

In February, he imposed a 25% tariff on imports from Mexico and Canada, along with a 10% levy on Canadian energy. Around the same time, a 10% tariff was also placed on Chinese goods. In March, the US introduced a 25% import tax on all steel and aluminium, including items made from those metals. April brought even broader changes. Foreign-made cars were hit with a 25% tariff, and a 10% “baseline” tariff was applied to nearly all imported goods, affecting countries like the UK. Trump dubbed the announcement day “Liberation Day,” calling it a historic move to protect American industry. It marked the most aggressive US tariff hike since the Smoot-Hawley Tariff Act of 1930, which famously worsened the Great Depression. 

Soon after, the US imposed even higher tariffs, ranging from 11% to 50%, on goods from roughly 60 countries identified as the “worst offenders” in trade practices. Other countries quickly retaliated. A fierce back-and-forth between the US and China saw tariffs soar to 145% on Chinese imports and 125% on US goods. By May, both nations agreed to roll back tariffs by 115%, easing tensions and restoring some trade flows. Finally, at the end of May, Trump doubled steel and aluminium tariffs from 25% to 50%, reinforcing his commitment to a protectionist trade agenda.

Trump says the tariffs are intended to encourage Americans to buy more US-made goods, increase government revenue, and drive domestic investment. He also argues they will help bring manufacturing jobs back to the US by making imported goods less competitive. A major focus of his policy is to reduce the US trade deficit, which currently stands at around $140 billion, by discouraging reliance on foreign products. Beyond economics, Trump frames the tariffs as a matter of national security and fairness, claiming that countries like China, Mexico, and even allies such as Canada have taken advantage of the US for too long through unfair trade practices, subsidies, and weak enforcement of trade rules.

Who is Affected?

Trade has long been a cornerstone of globalisation, which began accelerating in the late 1800s as many countries reduced tariffs and moved toward free trade. Globalisation has made national economies more integrated and interdependent. Today, most goods are no longer produced entirely within one country, parts are often sourced from multiple nations and assembled elsewhere. But as tariffs rise and more governments adopt protectionist policies, countries are being pushed to become more self-reliant. This is easier said than done, as decades of global trade have made that task increasingly difficult.

The recent tariffs have affected far more than just the US, they've sent ripple effects across the world. In the US, higher import costs are being felt by both businesses and consumers. Companies that rely on imported materials like steel and aluminium now face increased production costs, which are often passed on to customers through higher prices. While some US industries may see a short-term boost and job growth, such as domestic steel manufacturing, others like auto manufacturing, could suffer job losses due to rising input costs.

These pressures may contribute to rising inflation and a weaker US dollar. In fact, as of 2025, the US dollar has fallen to a three-year low against major global currencies. This is significant because the dollar is the world’s primary reserve currency, held in large amounts by central banks worldwide and used in nearly half of all international trade. A weaker dollar not only affects domestic purchasing power but also has global implications for trade and finance.

Internationally, trade retaliation is already underway, most notably between the US and China, resulting in sharp declines in exports and growing uncertainty in global markets. Additionally, supply chains are being disrupted, as many countries depend on imported components to produce their own goods. These shocks can slow down economic growth, especially in trade-dependent nations. The tariffs have also strained relationships with US allies, some of whom are now working to establish new trade agreements that bypass the US entirely. Some economists say this could harm US competitiveness in the long run.

Where Does This Leave Us?

Trump’s new wave of tariffs marks a significant shift in US trade policy, with effects reaching far beyond American borders. While intended to protect domestic industries and rebalance trade, these measures have sparked economic uncertainty, disrupted global supply chains, and strained international relationships. As countries respond and adapt, the long-term impact of this protectionist turn remains to be seen, but it’s clear that the global economy is entering a more fragmented and unpredictable era.