Upon assuming office on January 20, the tariff decisions made by US President Donald Trump created ripples in the financial markets and infused global economic instability. This string of events is presented in chrono order for your understanding: On February 1, Trump imposed a 25% tariff on imports from Mexico and most Canadian goods, alongside a 10% tariff on products from China. The move was attributable to demands to control the influx of fentanyl and illegal immigrants to the US.
On February 3, the imposition of tariffs on Mexico and Canada was put hold by President Trump, who agreed on a 30-day ceasefire in return for border and crime enforcement concessions. However, such an agreement failed to materialize between the US and China. For de minimis, or low-priced, packages from China, he postponed levies till the Commerce Department corroborates the assurance of process and tariff revenue collection systems.
By February 10, the tariffs on steel and aluminum were raised to a flat 25%, making no room for exceptions or exemptions. This was followed by the enforcement of 25% tariffs on Mexican and Canadian goods from March 4, as indicated by Trump on March 3. Additionally, fentanyl-related tariffs on all Chinese imports had a twofold surge to 20%.
On agreeing to postpone tariffs on certain Canadian and Mexican-built vehicles for one month after a conversation with General Motors and Ford CEOs and Stellantis chair on March 5, President Trump took steps to exempt Canadian and Mexican goods under a North American trade pact from the 25% tariffs for a month, beginning March 6.
On March 26, he unleashed a 25% tariff on imported cars and light trucks. In April, Trump enforced global tariffs with a baseline of 10% on all imports, along with higher duties on some of the United States’ key trading partners.
Significant changes took shape on April 9 as Trump suspended most of his country-specific tariffs that were implemented less than a day earlier, following immense turmoil in financial markets that caused trillions to disappear from global bourses. Notwithstanding these turbulent times, a general 10% duty remained on virtually all US imports.
In a respite to the markets on April 13, the US administration allowed exclusions from steep tariffs on electronics, primarily smartphones and computers, majorly imported from China.
Pursuant to Section 232 of the Trade Act of 1962, the Trump administration, April 22 onwards, initiated national security investigations into pharmaceutical and semiconductor imports, marking the commencement of its bid to impose tariffs on both sectors.
In a seemingly unusual move, Trump placed a 100% tariff on all non-US-made films on May 4.
Aiding in striding towards global trade equilibrium, President Trump and British Prime Minister Keir Starmer declared a limited bilateral trade deal on May 9 that ensured 10% tariffs persisted on British exports, expanded agricultural access for both countries, and slashed the high US duties on British automobile exports.
On May 12, the US and China came to terms with a temporary tariff reduction. Their 90-day truce led the US to slash previously imposed additional tariffs on Chinese imports from 145% to 30%, while China’s duties on US imports witnessed a reduction from 125% to 10%.
In another move that favoured traders, the rate of the low-value ‘de minimis’ tariff on Chinese shipments was reduced from 120% to 54% for items valued up to $800, on May 13.
A straight 50% tariff on European Union goods starting June 1 was proposed by Trump on May 23, who also cautioned Apple of a 25% tariff if the phones sold in the US were produced outside.
The deadline for trade talks was extended until July 9, following an agreement by the Trump administration on May 25. However, a US trade court barred the tariffs from taking effect from May 28, ruling Trump’s imposition of blanket duties on imports from US trade partners as an overreach of his authority. The Trump administration resolved to appeal this ruling.
On June 3, the Trump administration put into effect higher tariffs on imported steel and aluminium, raising them from 25% to 50%. Further discomforts for the auto industry came on June 12, when Trump hinted at a looming tariff hike, arguing that it would encourage automakers to hasten US investments.