After his re-election, the past few months has seen Trump delivering to the world a slew of laws and decisions that can only be described as radical. While we could write about everything from government mandated migrant hunts to the somewhat questionable new members of his governmental party, today we will be focusing on a more neutral topic; Trump’s most recent tariffs, and what they mean for the world at large.
It is said that President Donald Trump considers the word "tariff" the fourth-most beautiful word in the dictionary, behind "God," "love" and "religion." Mildly concerning, but nothing new. Even during his previous term and the years between then and now, Trump has made his economic stance abundantly clear; America First. If there’s a way to decrease the profits other countries may be earning off exports to the USA, it is almost certain that Trump will have thought of it, and pretty likely that he’s implemented it as well. For those who might not be well-versed with economic theory, a tariff, by definition, is a tax or duty to be paid on a particular class of imports and exports. Take it as a sort of price hike on imports to dissuade consumers from buying them.
For the three major countries we’ll be discussing in this article, Canada and Mexico have had a 25% additional tariff, with China having a 10% additional tariff imposed on all goods imported from 12.01 am, 1st Feb 2025. Canadian energy imports (such as crude oil) are taxed at a lower rate of 10%. This sweeping act of protectionism, like most other bold moves by people in positions of political power, was justified by an emergency law. More specifically, the International Emergency Economic Powers Act.
Using the claim that neighbouring countries were failing to stop a dangerous flow of “illegal aliens” and fentanyl from crossing the USA borders, these tariffs were imposed to…politely urge…Canada and Mexico to do better. As for China? That’s really just more of the long-running list of issues between the USA and China, but we’ll be discussing that one last.
Regardless of justification, these tariffs also come with a promise; the threat of further (and heavier) tariffs if these countries choose to retaliate (unsurprisingly, they have). This, along with an earlier threat against Columbia to accept illegal immigrants or face a similar tariff, has begun to set a precedent of weaponising trade for the USA’s benefit. With the USA generally serving as a hub for trade and many countries dependence on said trade to sustain the economy (Singapore being a prime example), threatening to withhold this in order to force concessions from other nations has served as a successful and cutthroat method of pressuring them into complying with Trump’s agenda.
Mexico and Canada fall under the same umbrella of blame in Trump’s eyes. According to a White House press release, these two countries have been accused of contributing to a growing production of dangerous narcotics that trickle into the USA (though with the way they word it, it’s more of a flood) and affecting unfortunate Americans in the process. While the simplest explanation for these tariffs is that they’re a thinly veiled attempt at enacting beggar-thy-neighbour policies, there may be other more important reasons at hand. For instance, contrary to the way it’s portrayed by Trump, less than 1% of fentanyl and illegal crossings into the United States come from Canada. Furthermore, anyone who has studied basic economics can tell you why heavy tariffs are detrimental in the long run; an interconnected world sustained on keeping the flow of trade alive would simply grind to a halt if one of the biggest players simply removes itself from the game, and that’s not even considering the issues the United States may face if their multinational industries lose business. So what’s the reasoning behind such a bold move?
(Author’s note 1: Soon after the writing of this article, Mexico and Canada have folded in response to the USA’s demands, just hours before the tariffs were meant to come into effect. Whatever Trump might have intended to do, he’s definitely succeeded.)
It remains more in the realm of speculation, but it is likely that Trump’s threats are meant to remind these countries of their place on the totem pole; a threat and a warning at the same time. A similar, albeit smaller example can be found in 2019, where Mexico averted a 5% tariff on all products after agreeing to apprehend more Central American migrants and buying more US agriculture products. Rather than utterly shatter the economy, Trump may be looking to force his neighbours to negotiate and commit to measures that end up benefiting the USA in some way. Fentanyl production and distribution still remains a growing concern in Mexico. Furthermore, the upcoming USMCA negotiations in 2026 could very well allow the USA to have free reign if Mexico and Canada are cowed into submission beforehand. A stick and carrot approach, so to speak.
Similarly, Trump has ordered an end to the de minimis loophole (duty free imports of small value packages below $800) alongside the additional 10% imposed tariffs. Despite consistent hostilities between the two superpowers, these actions seem more symbolic than antagonistic; China has also signaled a willingness to enter negotiation talks rather than up the ante with retaliatory tariffs. Given that China’s economy is increasingly less dependent on trade (and has plenty of other trading partners to work with), it could very well be that China simply does not care enough about the implicit threat to react in any major way; especially after the ongoing US-China trade war has led to China increasing domestic production to dissolve the need for US trade. Even Trump's own fact sheet released by the White House acknowledges that trade only accounts for 37% of China's GDP as compared to 67% of Canada's and a staggering 73% of Mexico's. Of course, this does not mean that such actions will go unnoticed, for the USA may very well choose to try and target China in other aspects, and vice versa.
(Author’s note 2: China, unlike Mexico and Canada, has chosen to retaliate with a 15% tariff imposition, starting yet another saga in the long-lasting trade war between the two superpowers. Certain rare earth mineral exports to the US are also newly banned. No surprise there. The repeal of the de minimis exemption has been temporarily placed on hold as of 8 February to address the utter havoc caused by the abrupt announcement. Again, no surprise there.)
From the Golden Age of Capitalism to more modern times, the USA has always been a reliable trading partner. Unfortunately for the world, this reputation seems to be dissolving as the years go by. Nations such as Panama and Denmark may start quietly withdrawing from the US trade hub before they can hit the chopping block like the US’ long-time partner Colombia. No, Greenland is not for sale. Furthermore, China could continue to extend its sphere of influence, primarily in the Global South, as a more palatable alternative to the increasingly hostile USA. The lesser of two evils, so to speak.
In the end, we can only guess at what’s to come. After all, despite whoever’s currently in charge of it, the USA remains as one of the world’s major superpowers. And Trump, for all his flaws, is an excellent businessman. Some countries may choose to bend the knee if it prevents a confrontation. And if they refuse to back down? Well, Trump has always played with fire…and he’s not afraid to burn the house down in the process if it means America comes out on top.
*As the situation remains highly fluid, information within this article is taken to be accurate as of the date of publication, 8 February 2025.
References
Bond, D. E., Spak, G., Saccomanno, I., & Scoles, S. (2025, February 2). President Trump imposes 25% tariffs on Canada and Mexico, and 10% tariffs on China. White & Case LLP. https://www.whitecase.com/insight-alert/president-trump-imposes-25-tariffs-canada-and-mexico-and-10-tariffs-china
Bradsher, K., Swanson, A., Holman, J., & Eavis, P. (2025, February 4). U.S. Postal Service reverses decision to halt parcel service from China. The New York Times. https://www.nytimes.com/2025/02/04/business/usps-china-de-minimis.html
Nakamura, D., Wagner, J., & Miroff, N. (2019, June 7). Trump announces migration deal with Mexico, averting threatened tariffs - The Washington Post. https://www.washingtonpost.com/politics/trump-could-decide-over-the-weekend-to-hold-off-on-tariffs-white-house-official-says/2019/06/07/6adb7d86-892d-11e9-98c1-e945ae5db8fb_story.html
Nicholas, P. (2025, February 3). Trump’s antagonism risks pushing U.S. allies closer to China. https://www.nbcnews.com/politics/donald-trump/trump-antagonism-us-allies-risks-china-rcna190346
O’Neil, S. K., & Huesa, J. (2025, February 5). What Trump’s trade war would mean, in nine charts. Council on Foreign Relations. https://www.cfr.org/article/what-trumps-trade-war-would-mean-nine-charts
The United States Government. (2025, February 2). Fact sheet: President Donald J. Trump imposes tariffs on imports from Canada, Mexico and China. The White House. https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china
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