Investors have had to deal with the issue of tariffs at least since Donald Trump took office as US President in January 2025. The US government's tariff policy has startled investors around the world and reshuffled the cards. Below you will find all the background information on the developments in the Customs conflict. First, however, there is an introduction to the topic and a look back at past trade disputes.
The most important in a nutshell
- The tariff dispute initiated by Donald Trump has caused a global stir and triggered recession worries
- Donald Trump is trying to use the tariff dispute to reduce the US foreign trade deficit, among other things
- The impact of the tariff dispute on the global economy remains unclear to date
What strategy is Donald Trump pursuing with the introduction of punitive tariffs?
With the introduction of punitive tariffs, the US President wants to give the domestic economy a boost. Strengthen your back and reduce its own foreign trade deficit.
Worth knowing: A customs duty is a levy imposed by the state on goods that are either imported (import duty) or exported (export duty). In the narrower sense, a customs duty is not least an instrument of trade policy to artificially increase the prices of foreign goods. As a rule, the aim is to protect domestic products and generate revenue.
Historical trade disputes - punitive tariffs as a popular tool
During Donald Trump's first term in office (2017-2021), the USA launched a trade war with China and imposed punitive tariffs on Chinese goods totaling over 360 billion US dollars ordered. China countered on US products such as soybeans, cars and whiskey.
While 25 percent was estimated for steel imports, 10 percent applied to aluminum imports. In addition to the eurozone (EU) Canada and Mexico affected. The EU imposed retaliatory tariffs on US goods such as Harley-Davidson, jeans and whiskey.
But even back in 1930, the so-called "Smoot-Hawley Customs Act" in the USA helped to stabilize the economy during the "Great Depression" by massively increasing import tariffs. However, the retaliatory tariffs imposed by other countries exacerbated the global economic crisis.
The trade conflict between the USA and Japan in the 1980s should also be emphasized. The USA accused Japan of exporting cars and electronics at dumping prices and introduced punitive tariffs as a result.
Historical developments show that punitive tariffs are obviously a recurring tool in international trade policy.
Chronology of the trade conflict initiated by Donald Trump - All important developments
- On February 1, 2025, just a few days after taking office, Donald Trump signs a decree imposing tariffs of 10% on goods from China and 25% on Canada and Mexico. Shortly before the tariffs come into force, Trump suspends the tariffs against both China and Canada for 30 days. However, the tariffs against the People's Republic are due to come into force on February 4.
- On February 9, 2025, Trump orders tariffs of 25 percent on all steel and aluminum imports into the United States.
- 07.3.2025: The USA suspends tariffs on goods from Mexico and Canada as far as possible and temporarily for the time being. According to Trump, the decision will initially apply from April 2. All goods covered by the USMCA free trade agreement will not be subject to punitive tariffs.
- March 27, 2025 is particularly important for Car manufacturer a shock. The US President announces 25% special tariffs on car imports into the USA. This refers to all cars that are not produced in the USA. Car parts are also to be subject to tariffs. An exception is announced for car imports that fall under the North American USMCA free trade agreement with Canada and Mexico. Depending on the proportion produced in the United States, a lower rate of duty could apply.
- The so-called "Liberation Day" on April 2 causes quite a stir. Trump announces punitive tariffs against almost "all countries" in the Rose Garden of the White House. Tariffs of ten percent were imposed across the board on most imports into the USA. Tariffs of 20 percent are planned for the European Union and 34 percent have been estimated for China.
"For decades, our country has been looted, pillaged, raped and plundered, by nations near and far, by friends and foes alike," said Donald Trump at the beginning of April. The US President describes the day as one of the most important in US history. The "golden age" of the USA would return, he said.
Individual customs duties at a glance:
| Country | Penalty duty in percent |
|---|---|
| Lesotho | 50 |
| Saint Pierre and Miquelon | 50 |
| Kambodscha | 49 |
| Laos | 48 |
| Madagaskar | 47 |
| Vietnam | 46 |
| Myanmar | 44 |
| Sri Lanka | 44 |
| Falkland Islands | 41 |
| Syrien | 41 |
| Mauritius | 40 |
| Iraq | 39 |
| Guyana | 38 |
| Bangladesch | 37 |
| Botswana | 37 |
| Réunion | 37 |
| Serbien | 37 |
| Thailand | 36 |
| Bosnien und Herzegowina | 35 |
| China | 34 |
| Nordmazedonien | 33 |
| Angola | 32 |
| Fidschi | 32 |
| Indonesien | 32 |
| Taiwan | 32 |
| Libyen | 31 |
| Moldova | 31 |
| Switzerland | 31 |
| Algerien | 30 |
| Nauru | 30 |
| South Africa | 25 |
| Japan | 24 |
| European Union | 20 |
| Argentina | 10 |
| Brazil | 10 |
| Saudi-Arabien | 10 |
| Turkey | 10 |
| Great Britain and Northern Ireland | 10 |
Source: Daily news
- On April 4, 2025, China reacted to the new US tariffs and also raised the additional tariff for US imports to 34 percent, which will apply from April 10.
- On April 8, 2025, Trump increased the pressure on China by announcing additional 50 percent punitive tariffs on Chinese goods. The US President demanded the withdrawal of counter-tariffs on US imports.
- The EU lays out its announced punitive tariffs for US imports. "We have taken note of President Trump's announcement. We want to give the negotiations a chance. While we finalize the adoption of the EU countermeasures, which were strongly supported by our Member States, we will suspend them for 90 days. If the negotiations are not satisfactory, our countermeasures will come into force," said EU Commission President Ursula von der Leyen.
- 10.04.2025: China counters in the tariff dispute with the USA and increases import duties on all US imports by 50 percentage points, resulting in new extra tariffs of 84 percent.
- On 11.04.2025, Trump orders a 90-day Customs break for numerous countries, as Trump announced on his "Truth Social" network. A reduced tariff rate of ten percent would apply for this period, which would apply to more than 75 countries that have shown a willingness to negotiate and have not yet announced any retaliatory measures. For Chinese imports, however, Trump has announced a tariff of 125 percent an.
- The People's Republic of China increases tariffs on US imports to 125 percent, further escalating the escalation spiral.
- On April 12, 2025, the tariff dispute between the world's two largest economies escalated further. While the tariffs for imports into the People's Republic from the USA were increased to 125%, imports from China were burdened with an additional 145%.
- 29.04.2025: US President Donald Trump has issued a Decree to mitigate the punitive tariffs for car manufacturers, so that only one tariff will apply. This means that either 25 percent will apply to cars produced abroad or 25 percent to steel or aluminum. In this way, manufacturers should not be burdened with multiple tariffs, it was said.
Conclusion Trump's tariff dispute
The trade dispute initiated by the United States under the leadership of US President Donald Trump has already caused quite a stir and shifts on the financial markets since he took office in January 2025.
Uncertainty about the effects on the global economic engine, which are difficult to predict, could repeatedly give rise to concerns about a global slowdown and thus fears of recession.
The Republican's erratic policy is likely to keep investors on edge in the coming months and years. It remains unclear whether the so-called "reciprocal tariffs" will be reintroduced at the end of the 90-day period or whether a solution can still be found.
