second trump tariffs

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    The second Trump tariffs are trade initiatives announced by Donald Trump during his second administration as President of the United States. Trump has long promoted import tariffs as a method of negotiating deals and retaliating against countries he believes are "ripping off" the United States.
    After being reelected to a second term beginning in 2025, Trump resumed a trade war with China and threatened a second one with Canada and Mexico. Trump announced direct tariffs on Mexico and Canada would be paused for one month, until March 4, 2025, after both countries agreed to take further steps to protect U.S. border security. Several countries, including the European Union, began to proactively negotiate with Trump to avoid tariff wars.
    In February 2025, Trump began announcing tariffs that would apply to all countries. Global 25% tariffs on steel and aluminum products are expected to begin March 12, 2025. Trump asked cabinet members to submit a report on potential reciprocal tariffs by August 2025.


    Background


    Since the 1980s, Trump has advocated for import tariffs as a tool to regulate trade and retaliate against foreign nations that he believes have been "ripping off" Americans. In his campaigns for U.S. presidency, Trump promised to use tariffs to achieve a wide range of goals including preventing war, reducing trade deficits, improving border security, and subsidizing childcare. Although Trump has said foreign countries pay his tariffs, U.S. tariffs are paid by U.S. consumers and businesses either directly or in the form of increased prices. Trump also said his tariffs would reduce grocery prices for Americans, even though tariffs are inflationary. Shortly after being reelected to a second term, Trump acknowledged that tariffs may cause "some pain" for Americans but insisted "it will all be worth the price that must be paid".
    During his first term, Trump imposed tariffs on steel and aluminum imports, resulting in price increases for Americans. In December 2021, a metric ton of hot-rolled band steel was $1,855 in the U.S. compared to $646 in China and $1,031 in Europe. The World Trade Organization later ruled that the implementation violated global trade rules. While he and his successor, Joe Biden, rolled back some of these tariffs, most remained in place by the start of Trump's second term. Trump also launched a trade war with China which subjected 60% of U.S.-China trade to 20% tariffs and was widely characterized as a failure for the United States.
    In May 2019, Trump used tariff threats of up to 25% on Mexico to negotiate an expansion of his "Remain in Mexico" policy and the deployment of Mexican soldiers to help control illegal immigration. Mexico deployed nearly 15,000 troops to its border with the U.S. and 6,500 troops to its border with Guatemala. After years of U.S. tariffs and retaliations by Mexico and Canada, the three countries renegotiated NAFTA as the United States–Mexico–Canada Agreement (USMCA) and recommitted to 0% tariffs on most products traded between them. Five weeks after the USMCA went into effect, Trump used an exemption for national security concerns to implement a 10% tariff on Canadian aluminum after claiming it was flooding the U.S. market. He withdrew the tariff a month later, three hours before Canada planned to retaliate.


    2024 presidential campaign and transition


    While campaigning for his second term as U.S. president, Trump vowed to implement even larger tariffs, including a 60% tariff on China, 100% on Mexico, and 20% on all other countries. He also proposed using tariffs to penalize American companies that outsourced manufacturing, such as imposing a 200% tariff on John Deere. Additionally, Trump suggested replacing income taxes with tariff revenue, an idea that economists from the Peterson Institute and the Tax Foundation deemed "mathematically impossible."
    On November 25, 2024, after winning reelection, Trump pledged to impose a 25% tariff on all imports from Canada and Mexico unless the countries took steps to curb illegal immigration and drug trafficking—particularly fentanyl—into the United States. The Wall Street Journal noted that it was unclear under what economic or national security authority Trump could implement such a tariff and that doing so would violate the USMCA, which he had negotiated during his first term. Following phone calls with Mexican officials, Trump claimed that Mexican President Claudia Sheinbaum had agreed to "effectively closing our Southern Border" to avoid tariffs. Sheinbaum denied this but assured reporters that "there will not be a potential tariff war." Canadian Prime Minister Justin Trudeau met with Trump on November 29, 2024. On December 16, 2024, Trudeau announced a $1.3 billion security plan for the Canada-U.S. border which included the creation of a joint Canadian-U.S. "strike force" to combat transnational crime.
    During his inaugural address on January 20, 2025, Trump pledged to "immediately begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens."


    Global tariffs




    = Steel and aluminum tariffs

    =
    On February 10, 2025, Trump announced 25% tariffs on all steel and aluminum imports to the U.S., set to take effect on March 12, 2025, eliminating hundreds of exemptions previously granted by either himself or Joe Biden. Trump also said he would impose a new standard requiring steel to be "melted and poured" and aluminum to be "smelted and cast" within North America to prevent countries like Russia and China from circumventing other tariffs. Trump said he would consider reinstating an exemption for Australia, citing the U.S. trade surplus with the country.
    The U.S. was the world's largest importer of steel at the time, importing about 23% of the steel it consumed. In 2024 Canada was the largest supplier, exporting 6 million metric tons, followed by Brazil with 4.1 million, Mexico with 3.2 million, South Korea with 2.5 million, Vietnam with 1.2 million, and Japan with 1.1 million. Canada was also the U.S.'s top supplier of aluminum at 3.2 million metric tons.


    = Reciprocal tariffs

    =
    On February 13, 2025, Trump asked his staff to research custom reciprocal tariffs for every country, taking into account features like their existing tariffs, trade balances, and value-added taxes, and to report back in 180 days. Commerce Secretary Howard Lutnick said his team would have a plan ready by April 1, 2025. Bloomberg News suggested the "president’s decision not to implement tariffs right away could be seen as an opening bid for negotiation".
    Economists at Deutsche Bank estimated that a reciprocal tariff policy would raise the U.S. weighted average tariff rate from 1.5% in 2022 to 4.8%.


    Country-specific tariffs


    On January 31, 2025, the U.S. announced a 25% tariff on imports from Canada and Mexico, with the exception of 10% on Canadian crude oil and energy imports, and a 10% tariff on imports from China. The next day, Trump signed executive orders imposing the tariffs, effective February 4, 2025, under the International Emergency Economic Powers Act and the National Emergencies Act. The orders included clauses warning of further tariff increases if the targeted countries retaliated. According to Bloomberg News, Trump advisors Peter Navarro and Stephen Miller were the leading officials in the economic discussions regarding the imposition of tariffs. China was included at the urging of the National Security Council.
    Trump's executive orders initially suspended the de minimis exemption, which waives tariffs and reduces scrutiny for low value shipments, for China, Mexico and Canada. In 2016, Congress quadrupled the de minimis threshold from $200 to $800, resulting in a 600% increase in shipments claiming the exemption. Some of these shipments were linked to drug trafficking. However, subsequent executive orders reinstated the de minimis exemption for all three countries by February 7, 2025.


    = China

    =

    The Ministry of Commerce of China condemned Trump's tariffs, announced China would file a legal case against the US in the World Trade Organization, and said China "will take corresponding countermeasures to firmly safeguard its rights and interests". The United States' 10% tariffs on all Chinese goods went into effect on February 4, 2025. China retaliated with tariffs of 15% on coals and liquefied natural gas and 10% on oil and agricultural machines would go into effect on February 10, 2025. China also added PVH Corp. and Illumina to the Unreliable Entity List, launched an antitrust investigation into Google, and added export controls to some metals including tungsten.
    Capital Economics, a UK-based macroeconomic research consultancy, estimated that while the U.S. levied new tariffs on about $450 billion worth of Chinese goods, China's additional tariffs only targeted about $20 billion of U.S. goods. Julian Evans-Pritchard, the firm's head of China Economics, stated "The measures are fairly modest, at least relative to U.S. moves". Reuters said China's "limited" response "underscored an attempt by Chinese policymakers to engage Trump in talks to avert an outright trade war".


    = Canada and Mexico

    =

    Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum condemned Trump's actions and threatened immediate economic retaliation, but on February 3, 2025, all three leaders negotiated a one-month delay on the tariffs. As part of the agreement, Mexico committed to deploying 10,000 troops to its border with the United States, while Canada pledged to appoint a "fentanyl czar" and continue implementing the border security plan announced in 2024. In return, Trump pledged to take measures to curb weapons trafficking to Mexico and to collaborate with Canada on their joint anti-crime "strike force". Trump issued an updated executive order changing the start date of the tariffs to March 4 at 12:01 a.m. Eastern Time.


    = Europe

    =
    Before his second inauguration, Trump threatened to impose tariffs on Europe unless it reduced its trade deficit with the U.S. by increasing imports of American cars, agricultural products, and oil and gas. The US and the EU traded a record $1.6 trillion in 2023. The European Commission pointed out that while the U.S. ran a trade deficit with the EU in goods, it was offset by a trade surplus in services. On February 2, 2025, Trump told reporters he planned to impose tariffs on the European Union "pretty soon". He also suggested tariffs on the UK "might happen" but believed "that one can be worked out".
    Some EU leaders threatened retaliatory tariffs, while others expressed concerns about reigniting global inflation. "We have to do everything to avoid this totally unnecessary and stupid tariff war," said Polish Prime Minister Donald Tusk. On February 4, 2025, EU trade ministers met in Warsaw to discuss the U.S. president's threats. On February 7, 2025, the EU proposed lowering tariffs on car imports—including American cars—from 10% to a rate closer to the 2.5% tariff imposed by the U.S., a deal originally suggested in January by BMW CEO Oliver Zipse. The EU also offered to increase its purchases of liquefied natural gas and military equipment from the U.S.


    = Other countries

    =
    On January 26, 2025, a dispute arose between Colombia and the U.S. after Colombian president Gustavo Petro refused to allow the landing of two U.S. military aircraft carrying deported Colombian nationals. Petro called the treatment of deportees on military flights undignified and said he would accept deportation flights on civilian planes. In response, Trump ordered retaliation against Colombia and its officials, including 25 percent tariffs that would increase to 50 percent in one week if Petro did not reverse his position. Petro responded by ordering a 25 percent tariff on the U.S. that would also increase to 50 percent. Hours later, the U.S. said Colombia had agreed to "unrestricted acceptance" of deportees, including on military aircraft. Colombia said it would "continue to receive" deported Colombians and would guarantee them "dignified conditions."
    In November 2024 and again in January 2025, Trump warned BRICS countries that they would face 100% tariffs if they attempted to replace the U.S. dollar as a reserve currency.


    Impact assessments




    = United States

    =
    The Tax Foundation estimated that the new 10% tariff on Chinese imports would add $172 to the tax burden per U.S. household. Unlike in Trump's first term, there was no exception for Apple products or other popular consumer goods.
    The expected impact of the threatened 25% tariffs on Mexican and Canadian goods is much greater. For example, grocery prices were expected to rise as 2/3 of U.S. vegetable imports came from Mexico. PIIE estimated that such a tariff retained through 2029 would reduce the gross domestic product of the United States by US$200 billion. According to the Budget Lab at Yale University, American households would lose approximately US$1,200 in purchasing power. The Tax Foundation estimated that these tariffs would lead to a $1.2 trillion increase in U.S. tax revenue between 2025 and 2034, with Mexican and Canadian retaliatory tariffs causing a tax revenue increase of $958 billion during the same period.
    The Council on Foreign Relations notes the energy sector of the American economy is expected to be among the most impacted by tariffs. A 10% tariff on Canadian energy imports is expected to increase energy prices for American consumers, in part, because Canada is the biggest supplier of energy to the United States, including 61 percent of crude oil imports in 2021. American refineries, particularly in the Midwest, rely on crude oil to process into gasoline, and projections indicate that gas prices could increase up to 50 cents per gallon in the region due to tariffs. On February 2, 2025, Canadian company Irving Oil released a statement, noting, “The majority of the product produced at our Saint John refinery is bound for the U.S. market… This tariff will result in price increases for our U.S. customers and have impacts on energy security and the broader economy.” During his campaign, Trump promised voters he would cut energy prices in half during his first year in office.
    Economist Michael Hudson has argued that the tariffs have the potential to disrupt the global economy by disrupting the balance of payments between the United States and its foreign debtors. By reducing the export trade between the United States and countries targeted by the tariffs and raising the cost of dollar denominated goods, the US makes it more difficult for those countries to pay their dollar debts. Hudson believes this could cause a debt crisis, and compares it to the historical examples of the Latin American debt crisis and the inter-allied repayment of loans during the World Wars.


    = China

    =
    Nomura Holdings estimated that eliminating the U.S. de minimis exemption for Chinese goods "would slow Chinese export growth by 1.3 percentage points and GDP growth by 0.2 point". When the U.S. Congress raised the de minimis limit from $200 to $800 in 2016, they sparked a surge in U.S. imports of cheap Chinese goods. A 2023 U.S. House Select Committee report estimated that "nearly half" of all de minimis shipments originated from China and that Chinese e-commerce companies. Temu and Shein, estimated to comprise more than 30% of daily de minimis exemptions to the U.S., onboarded more sellers with a physical presence in the U.S. and expanded their distribution facilities beyond China to mitigate the impact of losing the U.S. de minimis exemption.
    On February 7, 2025, Trump suspended closing the exemption for China until the Secretary of Commerce notified him that adequate systems to process and collect tariff revenue were in place.


    = Other countries

    =
    Ontario Premier Doug Ford stated that the tariffs would likely impact around half a million jobs in the province's automotive industry. Peterson Institute Director of Studies Marcus Nolands believed the tariffs would cause deindustrialization in Mexico.


    See also


    First Trump tariffs
    Movements for the annexation of Canada to the United States (Trump Proposals)
    China–United States trade war


    References




    External links


    "Fact Sheet: President Donald J. Trump imposes tariffs on imports from Canada, Mexico and China". The White House. February 1, 2025.
    "Executive Order: Imposing duties to address the flow of illicit drugs across our northern border". The White House. February 1, 2025.

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