🌍 What Is a Tariff War?
A tariff war, or trade war, is when countries impose tariffs (taxes) on each other’s goods to protect domestic industries or retaliate against perceived unfair trade practices.
2018–2020
Reason: Addressing the U.S. trade deficit and alleged unfair trade practices by China (e.g., intellectual property theft, forced tech transfers)
Actions Taken:
U.S. imposed 25% tariffs on $250B+ of Chinese goods
China retaliated with tariffs on U.S. exports (soybeans, pork, etc.)
Phase One Deal (2020):
China agreed to increase U.S. imports by $200B over 2 years (which it failed to fully meet)
Tariffs remained largely in place
Trump's Second Term (2025)
February 2025:
President Trump signed Executive Order 14195, establishing a new 10% baseline tariff on all Chinese imports, in addition to existing tariffs averaging 20%.
China responded with tariffs of 15% on coal and liquefied natural gas, and 10% on crude oil and agricultural machinery.
March 2025:
The U.S. increased baseline tariffs on Chinese imports from 10% to 20%.
China retaliated by imposing a 15% tariff on U.S. chicken, wheat, corn, and cotton, and a 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products.
April 2025:
On April 2, the U.S. added a 34% "reciprocal tariff," resulting in an effective minimum tariff of 54% on all Chinese imports.
China announced a 34% tariff on all U.S. imports, effective April 10.
On April 9, the U.S. increased tariffs on Chinese goods to 125%, later clarified to 145%.
In response, China raised tariffs on U.S. goods to 125% on April 12.
🔹 Current Status (as of April 13, 2025)
The U.S. maintains a 145% tariff on Chinese imports.
China has imposed a 125% tariff on U.S. goods.
President Trump has temporarily exempted certain tech products, including smartphones and laptops, from the new tariffs, but these items may face separate levies in the future under national security investigations.
China has described the U.S. tariff exemptions as “a small step” and urges the U.S. to remove all remaining tariffs.
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U.S. Action
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China’s Response
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💼 Economic & Political Impact
✅ On the U.S.:
Mixed results:
Some manufacturing jobs protected
Higher costs for U.S. consumers and businesses
Reduced exports (especially farmers hit hard)
Created tensions with allies and supply chain disruptions
✅ On China:
Exporters suffered initially, but diversified to other markets
Pushed for greater self-reliance and export tech products elsewhere
✅ Global Supply Chains:
Companies shifted manufacturing to Vietnam, India, and Mexico
Accelerated decoupling from China
U.S. vs. European Union Tariff Conflict (2018–2025)
🔹 Background (2018–2021)
Reason: Disputes over aircraft subsidies (Airbus vs. Boeing), digital services taxes, and metal tariffs.
Actions:
The U.S. imposed tariffs on EU steel and aluminum (25%) under Section 232, citing national security concerns.
The EU retaliated with tariffs on U.S. products such as motorcycles (Harley-Davidson), jeans, and bourbon.
Resolution (2021): A temporary truce was established, with ongoing negotiations to resolve the disputes.
🔹 Escalation in 2025
February 2025:
President Donald Trump announced a 25% tariff on all EU imports, criticizing the bloc for trade imbalances and stating that the EU was “formed to screw the U.S.” Wikipedia, la enciclopedia libre
April 2025:
The U.S. implemented a 10% baseline tariff on all imports, with an additional 20% tariff specifically targeting EU goods, bringing the total to 30%. Википедия — свободная энциклопедия
The EU responded by approving retaliatory tariffs on specific U.S. products, set to take effect in two phases: the first on April 15 and the second on May 15, covering a total of €28 billion worth of U.S. imports. 维基百科，自由的百科全书
The EU’s countermeasures targeted a wide range of U.S. goods, including agricultural products (poultry, beef, seafood, nuts), industrial goods (steel and aluminum), and consumer products (textiles, household appliances). Википедия — свободная энциклопедия
President Trump threatened further tariffs, including a 200% tariff on European alcoholic beverages, in response to the EU’s planned 50% tariff on U.S. whiskey. Википедия — свободная энциклопедия+1Business Insider+1
🔹 Current Status (as of April 13, 2025)
The U.S. maintains a 30% tariff on EU imports.
The EU has approved retaliatory tariffs on U.S. goods, with implementation staggered over April and May.
Negotiations are ongoing, with the EU expressing a preference for dialogue but also preparing further countermeasures, including potential digital services taxes targeting major U.S. tech firms.
U.S. vs. Canada & Mexico Tariff Conflict (2018–2025)
🔹 Background (2018–2019)
Reason: National security concerns over steel and aluminum imports.
Actions:
In 2018, the U.S. imposed tariffs of 25% on steel and 10% on aluminum imports from Canada and Mexico under Section 232.
Canada and Mexico retaliated with tariffs on various U.S. goods, including maple syrup, whiskey, and other products.
Resolution (2019): Tariffs were lifted as part of the United States-Mexico-Canada Agreement (USMCA) deal.
🔹 Renewed Tensions and Tariffs (2025)
February 1, 2025: President Donald Trump signed executive orders imposing 25% tariffs on all imports from Mexico and all imports from Canada, except for oil and energy, which were taxed at 10%. These tariffs were justified under the International Emergency Economic Powers Act (IEEPA), citing concerns over illegal immigration and fentanyl trafficking. Wikipedia
March 4, 2025: The U.S. tariffs took effect. Canada immediately retaliated with 25% tariffs on a range of U.S. goods, including vehicles, alcohol, and consumer products. Provinces like Ontario and Quebec implemented additional measures, such as removing U.S. alcohol from store shelves and reviewing procurement contracts with U.S. companies. Wikipedia
March 6, 2025: President Trump delayed tariffs on goods compliant with the USMCA, accounting for approximately 50% of imports from Mexico and 38% from Canada. This exemption was expected to end on April 2 but was extended indefinitely. Wikipedia
April 2025: Canada’s economy showed signs of strain due to the tariffs, with job losses and declining consumer confidence. The Bank of Canada reported that 32% of businesses expected a recession within the next year. WSJ
🔹 Current Status (as of April 13, 2025)
The U.S. maintains a 25% tariff on Canadian and Mexican imports, excluding USMCA-compliant goods.Business Insider
Canada continues to apply reciprocal 25% tariffs on U.S. goods and is exploring additional support measures for affected sectors.WSJ
Mexico has delayed retaliatory tariffs but is considering non-tariff measures and seeking to strengthen trade ties with other partners.
Negotiations are ongoing, with Canada and Mexico advocating for the removal of tariffs and adherence to USMCA provisions.
U.S. vs. India Tariff Conflict (2019–2025)
Background (2019–2024)
Trigger: India’s digital services tax and market access barriers.
Actions:
In 2019, the U.S. removed India from the Generalized System of Preferences (GSP), ending duty-free access for approximately $6 billion worth of Indian goods.
India retaliated with tariffs on U.S. products, including almonds, apples, and manufactured goods.
Developments:
Despite ongoing negotiations, a comprehensive trade deal remained elusive through 2024.
Escalation and Negotiations (2025)
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. Wikipedia
India reduced tariffs on motorcycles and whiskey, pledged to review additional tariffs, and offered to increase U.S. energy and defense equipment imports. Wikipedia
April 2, 2025:
The U.S. applied a 26% “reciprocal tariff” on Indian exports, citing India’s average tariff rate of 12% compared to the U.S.’s 2.2%. The Diplomat
India signaled it would negotiate with the U.S. and would not seek retaliatory tariffs. Wikipedia
April 6, 2025:
India and the U.S. finalized terms of reference for talks over the first part of a bilateral trade deal, aiming to conclude the first phase by autumn 2025. Reuters
April 10, 2025:
The U.S. suspended the additional 26% tariff on Indian goods for 90 days, until July 9, 2025, offering relief to Indian exporters and providing a window for advancing trade agreement talks. The Economic Times
Current Status (as of April 13, 2025)
The U.S. maintains a 10% baseline tariff on Indian imports, with the additional 26% tariff suspended until July 9, 2025. The Economic Times
India is actively engaging in negotiations to finalize the first phase of a bilateral trade deal by autumn 2025, aiming to boost bilateral trade to $500 billion by 2030. Reuters
India has not pursued retaliatory tariffs and is focusing on diplomatic engagement to resolve trade tensions. BizNews India
