Tariff War Ignited by Trump

World Recap

- ANSHU JOSHI

This week, Trump initiated his campaign of imposing higher tariffs on various countries (read: a terror of tariffs). The new 25 percent tariffs imposed by US President Donald Trump on imports from Mexico and Canada have come into effect this week, coinciding with additional duties on Chinese products. Though the tariffs imposed on Canada and Mexico have further been paused due to the market breakdown. However, this development has ignited trade conflicts and has the potential to disrupt approximately USD 2.2 trillion in annual trade.

In a speech delivered to Congress, Trump indicated that further tariffs would be implemented on April 2, which would include "reciprocal tariffs", and non-tariff measures designed to address years of trade imbalances. His declarations have instigated a significant concern for the Indian government, particularly as India and the US engage in a cycle of reciprocal tariffs.

Last month, Trump enacted three executive orders aimed at imposing tariffs on imports from Canada, Mexico, and China, utilizing the authority granted by the International Emergency Economic Powers Act (IIEPA). The 10 percent tariffs on all goods imported from China became effective on February 4, 2025. Meanwhile, the tariffs on Canada and Mexico were initially suspended for 30 days and now have further been suspended due to market breakdown. In addition to these measures, Trump also issued a presidential memorandum directing the formulation of a strategy to increase the US tariffs in response to the tariffs, tax policies, and other economic practices of foreign nations, including exchange rate manipulations.