President Donald Trump just declared a trade war — again. Next week, new tariffs will be cut, and this time “everything is at stake,” the president said Friday at the White House during talks with Japanese Prime Minister Shigeru Ishiba.
Trump said he planned to announce the full details at a news conference early in the week, likely Monday or Tuesday. “We will be treated equally, no more, no less,” he told reporters at the Oval. He did not specify which countries would be hit or what the exact numbers would be, but the warning was broad enough to send U.S. trading partners into a frenzy.
"I think that's the only fair way to do it. That way, nobody gets hurt. They charge us. We charge them. It's the same thing. I think I'm of the opinion that it's not a flat fee, a tariff," Trump said.
Trump's Main Goals
Cars are in Trump’s crosshairs. “It’s always on the table. It’s a big deal,” he said during a news conference. The auto industry could face massive tariffs aimed at restoring the trade deficit, especially with Europe, as Trump is no fan of the European Union’s value-added tax (VAT), which hits U.S. exports particularly hard.
He criticized the EU for setting VAT rates that sometimes exceed 15 percent, making it expensive for American products to compete. “This tax is just off the charts,” Trump told reporters, pointing to Europe as the main problem.
The president also said the tariffs could replace the uniform, all-purpose 10-20% import tariff plan he discussed during the campaign. Instead of blanket tariffs, Trump now favors a tit-for-tat system. “I think I’m taking that line rather than a flat fee, a tariff,” he explained, adding that he’d rather hit countries where it hurts the most.
Along with cars, Trump is eyeing critical industries like steel, oil and pharmaceuticals, which he believes are essential to America’s global economic dominance. Last Monday, the US president announced 25% tariffs on imports from Canada and Mexico, but quickly lifted them after both countries promised to address his border security concerns.
But China wasn’t spared, as it was hit with 10% tariffs on Tuesday. As Cryptopolitan reported, the Xi administration responded with 15% tariffs of its own, though it temporarily suspended duties on low-cost goods shipped directly to American consumers. Officials are still working out how to handle that as of press time.
American consumers are paying the price
Once the tariffs go into effect, U.S. Customs and Border Protection (CBP) will be on high alert at 330 ports of entry across the country, including airports, seaports, and road crossings. CBP agents will inspect shipments, verify documents, and levy fines if importers violate the rules.
The money collected from tariffs goes directly to the U.S. Treasury’s General Fund. But here’s the thing: Most of the burden falls on U.S. importers, not foreign exporters. When U.S. companies import goods subject to tariffs, they often pass the extra costs on to consumers through higher prices, though JPMorgan research shows that foreign manufacturers sometimes cut prices to help U.S. consumers cope, but the odds are slim.
Under current CBP regulations, some goods avoid duties depending on how they are processed overseas. For example, U.S.-made products that leave the country and return unchanged are exempt from duties. But if they are “enhanced” overseas — such as gold turned into jewelry or auto parts assembled into vehicles — they are subject to duties when they are re-entered.
But Trump's tariffs are also about revenue. Historically, tariffs once funded a large portion of the federal government's budget. Today, they account for less than 3% of revenue, according to the Federal Reserve Bank of St. Louis.
Trump’s new measures could change that dramatically. The Tax Foundation estimates that combined tariffs on Canada, Mexico, and China could cost U.S. businesses $1.1 trillion over the next decade. Nearly $110 billion in tariff revenue is expected in 2025 alone if Trump’s plan is implemented.
The tariffs Trump imposed on China during his first term — and expanded during Biden’s presidency — currently bring in $77 billion annually. But that money, of course, is not without consequences.