The globe is once again entangled in the U.S. trade policy snares as trumped-up tariffs by President Donald Trump have set into motion a global trade conflict. The trade conflict between the USA and China has been raging for some time, but this renewal of tariffs on countries will bring harm for the given impact will be felt globally. This set of tariffs brings complex challenges for business and has severe warning signs for the world economy. The following illustrates events leading to the indefinite US global trade Cold War.
20 January: The Trade War Has Begun
Trump’s far-sighted and forthright policies have had both staunch supporters and brash critics. Clearly paving direct routes for foreign investment, on the first day of term he ordered barriers to be lifted on foreign investment in key domestic sectors. During the startup of planned new trade deals with Venezuela, he promised to tax every Venezuelan and Cuban company that did business with the U.S. $500 per month and promote export taxation.
26 January: A Dispute with Colombia
The hawkish stance was not restricted to North America. On January 26, Trump threatened to impose a 25% tariff on all imports from Colombia and other sanctions after President Gustavo Petro declined to allow U.S. military jets carrying migrants to Colombian airspace. Petro retaliated by increasing the Colombian tariff on American goods by 25%. But this dispute was short-lived after Colombia accepted the migrant flights, easing tensions.
01 February: Tariffs on North America and China
February 1st was a momentous day as Trump issued an executive order that put tariffs on imports from Mexico, Canada, and China. According to the order, 10% would be levied on all imports from China and 25% on imports from Canada and Mexico starting February 4th. In declaring a national emergency over undocumented immigration and drug smuggling, Trump justified these measures. The tariffs on Canada and Mexico would directly undermine the U.S.-Mexico-Canada Agreement (USMCA), a treaty intended to foster unrestricted trade between the three countries.
03 February: A Brief Respite for North America
The impact of the tariffs was immediate and severe for all three counties, as there were promises of retaliation. Nevertheless, on February 3rd, Trump agreed to a 30-day grace period on the tariffs for Canada and Mexico, so long as both partners took action to deal with US issues regarding border control and drug trafficking.
04 February: China Feels the Heat
While the US put a pause on North American trade, the 10% tax on imports from China to the US was still set for February 4th. China reacted almost immediately, stating new sanctions on multiple American products along with an antitrust investigation against Google. These Chinese tariffs of 10-15%, focused on major American exports such as coal, liquid gas, crude oil, agricultural machinery, and large-engine cars, were active from February 10th.
10 February: Increase on Steel and Aluminum Tariffs
On the 10th of February, Trump announced to further the trade conflict by higher taxes on the purchase of steel and aluminum. He placed restrictions on his 2018 steel tariffs, which meant a minimum of 25% on all imported steel, while also increasing the aluminum tariffs to 25% (originally 10%), effective on March 12th.
13 February: The Introduced Decline of “Reciprocal” Tariffs
The February 13th “Trump Tariff’ plan adds a distinctly new and capricious component to the American trade policy: the imposition of “reciprocal” tariffs. Trump proposed raising U.S. tariffs to the levels that other countries impose on American goods, which economists anticipated would be harmful for international trade and business. These reciprocal tariffs were not only limited to China, Canada, and Mexico but also included India and possibly European countries.
25 February: Copper and National Security
With the ever-changing national security focus, Trump issued an executive order on February 25th mandating the Commerce Department consider copper imports for tariff imposition on the grounds of national security because of its role in defense, infrastructure, and new technologies.
01 March: Lumber and Timber Under Scrutiny
The ever-changing focus of security led to the March 1st executive order in which Trump urged the Commerce Department to consider applying tariffs on lumber and timber imports in order to protect the construction and military sectors of the United States, citing national security concerns.
04 March: North America is Disconcerted While China Reacts
Neither Canada nor Mexico enjoyed a longer period of respite. On March 4, Canadian energy imports were subjected to a 10% tariff and the rest of Canada and Mexico had their imports facing a punitive 25% tariff. Subsequently, the US-China trade war faced escalation as Trump announced a 20% tariff on China imports. Immediate action was taken with Canada’s Prime Minister Trudeau announcing tariffs worth more than $100 billion for the US, which would come into effect over a period of 21 days. Canadian President Sheinbaum pledged retaliatory actions without specifying what action would be taken. Mexico also declared that they would submit plans for retaliatory responses without providing the details of the response. Alongside these actions, China declared that they would increase tariffs on certain US agricultural exports up to 15% and broaden export control measures for US-buying companies.
05-06 March: Lull in an Ongoing Conflict
An opportunity for potential de-escalation presented itself on March 5 when, after discussions with the “Big 3” car manufacturers, Trump permitted a one-month waiver on the new tariffs for U.S. automakers on subservient goods from Mexico and Canada. This was subsequently followed on March 6 with a more generalized postponement of 25 percent tariffs for a month on many goods imported from Mexico and some from Canada. Trump claimed Sheinbaum’s progress on border and drug smuggling gave him sufficient reason for the pause. Although this temporarily softened tensions, there remained broad uncertainty. Canada, which had announced an economically aggressive retaliatory set of tariffs totaling $30 billion, put on hold its second-wave tariffs worth $125 billion.
Week beginning March 10-12: Increase in the Trade War
Some assumptions have been made but let us go through the evolving narrative. On March 10th, China slapped Trump with a 15% tariff on American chicken, pork, soybeans, and beef in retaliation to the latter’s steeper tariffs on Chinese goods. This was after Trump had on March 4 inflicted extra surcharges on the tariffs for Chinese imports. On March 12th onwards, the saga continued with Trump stepping up the ante by placing blanket 25% duties on steel and aluminum with all previous concessions revoked. The European Union retaliated with their own set of trade sanctions, threatening to place duties on American industrial and agricultural goods to the tune of € 26 billion ($28 billion), ranging from textiles to bourbon and including a whole slew of other products.
13 March: Spirit and Wine Gain New Significance
The alcohol sector also faced the ire of the tariff threat. On this day in history, March 13th, Trump gave caution to the EU with a 200% levy on European spirits and champagne if they went ahead with their plans of 50% surcharges on American whiskey.
24-26 March: Oil, Cars, and the Tariff Cascade
Things took a turn for the worse. It started on March 24, when Trump declared a 25% tax on imports from any country that sells oil or gas and gets a multiplier on Venezuela, further squeezing China, the greatest oil buyer from Venezuela. Then, on March 26, Trump proclaimed he will also impose 25% taxes on automobile imports, while saying it will increase domestic industry but drawing accusations of harming automakers with more complicated global supply chains. The tariffs will be applied in phases beginning April 3 for cars, with imported car parts to follow in the subsequent weeks.
Conclusion: A Category 5 Global Economic Tornado
This timeline shows a reckless and steep escalation in trade conflict during the mandate of the United States of America President Trump. The constant back-and-forth, expanding target nations, and multiplier surrender sign think the help does too much—need-depend brace and tolls have pushed the markets into wildfire mode. No one, economists or entrepreneurs, is sure how long the damage due as a consequence of such a decision will have on trade worldwide, economic growth, and international partnership.
