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Ever since Donald Trump became the 47th US President, there has been a lot of uncertainty over tariffs. While it seemed that the uncertainty would subside after a judge ruled that the President overstepped his authority by imposing “reciprocal tariffs” on nearly all countries, there are signs that the trade war might escalate further.
A Timeline of Trump’s Tariffs
Trump vowed to bridge the country’s burgeoning trade deficits with his tariffs, and days into his presidency, he signed an executive order imposing blanket tariffs of 25% on most imports from Canada and Mexico, and a 10% tariff on Canadian energy products, citing border security and drug trafficking concerns. He also announced 10% tariffs on goods from China for the country’s alleged role in the US fentanyl crisis, which he later raised to 20%
Subsequently, he announced 25% tariffs on US steel and aluminum imports, which were even higher than his previous tenure when he had imposed a 25% tariff on steel and a 10% tariff on aluminum imports. He also imposed a 25% tariff on imports of cars and car parts.
On April 2, Trump announced reciprocal tariffs on nearly all countries. However, he later lowered the tariffs to 10% on all countries, barring China. At one point, imports from China attracted a tariff of as high as 145% amid the escalating trade war between the two countries. However, after a meeting between the two sides in Geneva, Trump lowered the reciprocal tariff on China to 10%. China is still subject to the 20% fentanyl-related duties, so imports from that country were subject to a 30% tariff in total.
The trade truce between the world’s two biggest economies came in as a big relief to markets.
Bessent Says US-China Trade Talks “Are A Bit Stalled”
Meanwhile, there are signs that the US-China truce is not holding off well. Speaking with Fox News, Treasury Secretary Scott Bessent said that U.S.-China trade talks “are a bit stalled” and would require intervention from top leaders of both countries.
“I think that given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other,” said Bessent. He added, “They have a very good relationship and I am confident that the Chinese will come to the table when President Trump makes his [preferences] known.”
In a post on Truth Social, President Trump said that his tariffs hurt the Chinese economy badly. “Two weeks ago China was in grave economic danger! The very high Tariffs I set made it virtually impossible for China to TRADE into the United States marketplace which is, by far, number one in the World. We went, in effect, COLD TURKEY with China, and it was devastating for them. Many factories closed and there was, to put it mildly, “civil unrest,” he wrote on a long post.
Jamie Dimon Believes China Would Buckle Under Pressure
Meanwhile, JPMorgan Chase CEO Jamie Dimon has dismissed the notion that China would buckle under President Trump’s tariffs. “They’re not scared, folks. This notion that they’re going to come bow to America, I wouldn’t count on that,” said Dimon.
While Dimon said that China is a “potential adversary,” he added, “What I’m really worried about is us. Can we get our own act together? Our own values, our own capabilities, our own management.”
Dimon also warned that if the US is not the “preeminent military and preeminent economy in 40 years, we will not be the reserve currency. That’s a fact.” The JPMorgan chair advised urgency and said, “We have to get our act together, and we have to do it very quickly.”
Trump Raises Steel and Aluminum Tariffs to 50%
In a jolt to Trump, a US judge blocked his reciprocal tariffs late last month, which the administration appealed. The U.S. Court of Appeals for the Federal Circuit approved the administration’s request to temporarily pause a lower-court ruling.
Meanwhile, Trump has signaled yet another escalation in the trade war and has doubled the steel and aluminum tariffs to a whopping 50%. The President made the announcement at a U.S. Steel Corporation facility in Pennsylvania that he visited after approving the company’s acquisition by Japan’s Nippon Steel, which he had previously opposed.
The EU has vowed to retaliate against the tariffs and said, “If no mutually acceptable solution is reached, both existing and additional EU measures will automatically take effect on 14 July—or earlier, if circumstances require,” the EU spokesperson said.
They added, “This decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic.”
Trade Tensions Are Hurting US Companies Also
Meanwhile, growing US-China tensions are also working to the detriment of US brands. China is increasingly becoming a tough market for foreign brands like Apple, General Motors, and Starbucks, and they have been losing market share to domestic Chinese companies.
Apple lost its position as the biggest smartphone seller in China last year and fell to the third spot as domestic Chinese rivals gained market share at the iPhone maker’s cost. Vivo was the top-selling brand in the world’s second-biggest economy last year, followed by Huawei, whose sales have surged over the last two years.
According to data from research firm Canalys, Apple’s shipments in China fell 17% YoY in 2024, which was the biggest annual decline for the Cupertino-based company. Moreover, its shipments fell in all four quarters, with the pace of decline widening to 25% in the fourth quarter.
Apple had a full-year market share of 15% in China last year, while Huawei and Vivo had 16% and 17% share, respectively. Huawei has come up with competitively priced premium models and has grabbed significant market share from Apple
Many economists have expressed concerns that the trade uncertainty could push the US economy into a recession.
