Since taking office, President Trump has been diving headfirst into a more assertive trade policy than we saw during his first term. He’s letting his gut instincts take the wheel, aiming to catapult America to the top without much room for lengthy investigations or drawn-out deliberation processes.
From the get-go, Trump hasn’t hesitated to wave around the tariff stick, threatening duties on goods from just about every trading partner the U.S. has. That includes floating the idea of taxing over $1.3 trillion in imports from countries like Canada, Mexico, and China — a staggering amount compared to what was affected by tariffs in his entire first term.
Just this past Thursday, he unveiled a bold plan to overhaul global tariffs, sending a clear message: He’s ready to wield tariffs as a bargaining chip, no matter the friction it causes with trading partners, to get the concessions he wants.
He’s instructed his team to figure out new tariff rates for countries worldwide, factoring in the tariffs those countries impose on the U.S., as well as other practices like additional taxes on American goods and subsidies to their industries.
This move towards so-called “reciprocal tariffs” could shake the foundations of commitments the U.S. has within the World Trade Organization. Breaking away from these decades-old pledges might usher in an era marked by increased uncertainty for corporations and stoke the fires of global trade conflicts.
Yet, some of Trump’s tariff threats might just be tactical bluffs, never seeing the light of day. To him, tariffs are a potent leverage tool, something he’s keen on using to force other nations into giving ground on issues beyond trade, like migration or drug control. Trump and his supporters also view tariffs as key strategy tools, tactics to reverse the trend of factories moving overseas, bolstering jobs, and narrowing trade deficits.
Previously, during his first term, advisors who valued more open trade restrained him. Those advisors, along with leading Republicans and many business leaders, argued that high tariffs would prove harmful to both the stock market and the global economy.
Now, however, Trump is bolstered by advisors who back his confrontational trade philosophy. Among them are Peter Navarro, a staunch skeptic of trade policies, playing a crucial role in shaping Trump’s strategies; Howard Lutnick, nominated for commerce secretary; and Treasury Secretary Scott Bessent, both vocal supporters of tariffs.
In his first term, it took Trump over a year to roll out any tariffs. The global community was taken aback in April 2017 when he launched a national security probe into billions of dollars’ worth of steel and aluminum imports, even from allies like Canada, Europe, and Mexico. But it wasn’t until nearly a year later that any duties came into effect.
In August 2017, he announced a deep dive into China’s trade practices, branding them “unfair.” While the administration eventually slapped tariffs on over $300 billion of goods, these did not start until July 2018. A report was penned, public hearings held — a more procedural approach than the current environment.
Nowadays, Trump seems eager to bypass such drawn-out investigations before imposing tariffs. From his initial day in the Oval Office, he requested detailed reports on various trade matters, due by April. Nonetheless, he has already enacted related trade measures without waiting for those findings.
Last Thursday, Trump laid down his blueprint for reciprocal tariffs — also under review in a report expected soon — aiming to rebalance longstanding inequities. A White House fact sheet highlighted how some countries impose steeper tariffs on American goods than vice versa, such as Brazil’s 18 percent charge on ethanol compared to the U.S.’s 2.5 percent.
“We’re not out to harm others, but years of taking advantage of us have to end,” Trump declared, suggesting that the U.S. will return tit-for-tat where tariffs are concerned.
Shortly thereafter, he declared that a 25 percent levy would apply universally to steel and aluminum imports starting March 12, exclusions be damned.
On February 1, Trump nearly enacted tariffs on all imports from Canada and Mexico, over $900 billion in total, spurred by concerns about illegal drugs and immigration.
Ultimately, he dialed back these drastic measures temporarily after securing minor concessions, yet moved forward with a 10 percent tariff on all Chinese goods, exceeding $400 billion worth, criticizing China for failing to control fentanyl shipments to America.
Whether external pressures will eventually temper Trump’s resolve remains uncertain. He could change course if stock markets, which he values as a performance metric, take a nosedive—though recent markets have shrugged off his tariff threats. Alternatively, backlash from businesses fearing foreign countermeasures, or from farmers reliant on exports, could prompt a recalibration of his plans.
So far, Trump’s rapid-fire tariff proposals have stirred unease, inciting boycotts and frustration worldwide. The European Union, China, Canada, and Mexico are readying countermeasures that could backfire on American farmers and other export-reliant sectors.
Yet, some domestic entities have rallied behind Trump’s trade vision. Kevin Dempsey, CEO of the American Iron and Steel Institute, hailed Trump’s strategy as a step toward “restoring fairness in U.S. trade relationships.”
Contrarily, some corporations have hit pause on investments and hiring, awaiting clarity on Trump’s final tariff decisions. David French from the National Retail Federation expressed concern at the sheer scale of Trump’s initiative, predicting it could disrupt supply chains and increase costs for American families, simultaneously diminishing consumer purchasing power.
Additionally, the American Chamber of Commerce to the European Union warned that tariffs on steel and aluminum would have a “broad and overwhelmingly negative impact” on jobs and prosperity globally.
Douglas Irwin, a trade historian from Dartmouth College, suggested these proposed tariffs could mark one of the most significant trade tax hikes since the Smoot-Hawley act of the 1930s.
The threats of tariffs on imports from pivotal partners like Canada, Mexico, and China could represent a historic moment for U.S. trade policy.
These trade measures, especially the proposed reciprocal tariffs, which rest on subjective criteria, could be the last straw for the already strained global trading system helmed by the WTO. Edward Alden and Jennifer Hillman, experts in international relations, characterized the plan as “a complete violation of our WTO obligations,” potentially dismantling what remains of global trade rules.
Alden, while uncertain if Trump can or will stick to this aggressive path, noted potential pushback from American businesses and highlighted the logistical nightmare of enforcing varied tariffs worldwide as possible deterrents.
“I find some solace in the possibility that the administration doesn’t fully grasp the complexity they’re stepping into,” Alden noted.
