Donald Trump's tariffs have been a significant aspect of his economic policy, particularly in his second term. Here's a breakdown ¹:
Tariff Rates
- *Average Effective US Tariff Rate*: rose to 27% (the highest level in over a century) after Trump's "Liberation Day" tariffs, but was later rolled back to 15.1% as of June 1, 2025
- *China-US Trade War*: Trump escalated the trade war, raising baseline tariffs on Chinese imports to 145%, while China imposed a minimum 125% tariff on US goods
- *Steel and Aluminum Tariffs*: increased to 50% on June 4, 2025, for most countries, except the UK which remains at 25% due to ongoing trade deal negotiations
- *Automobile Tariffs*: 25% tariff imposed on automobiles
Impact and Reactions
- *Stock Market Crash*: Trump's "reciprocal tariffs" announcement triggered a stock market crash, prompting concerns about economic stability
- *Global Trade Partners*: many countries, including Canada and Mexico, retaliated with their own tariffs or initiated disputes at the World Trade Organization (WTO)
- *Economic Projections*: the Federal Reserve and OECD downgraded GDP growth projections, citing rising expectations of a recession
Legality and Controversy
- *Court Rulings*: the United States Court of International Trade ruled that Trump overstepped his authority by imposing certain tariffs, but the decision was stayed pending appeals
- *WTO Disputes*: several countries initiated disputes at the WTO, but the US has blocked new appointments to the Appellate Body, effectively paralyzing the WTO's dispute resolution process
- *Criticism*: many economists and experts criticized Trump's tariff policies as flawed, warning of higher prices, larger deficits, and greater inequality.