US President Donald Trump has implemented tariffs on imports from countries worldwide, aiming to strengthen American manufacturing, create jobs, and reduce the trade deficit. Critics warn that the measures could increase prices for consumers and disrupt the global economy.
The US Supreme Court is expected to rule soon on the legality of some of the tariffs.
What Are Tariffs?
Tariffs are taxes on imported goods, typically calculated as a percentage of the product’s value. For example:
- A 10% tariff on a $10 item adds $1, making the total $11.
Importing companies pay the tax, which they may pass on to consumers or reduce imports to avoid the cost.
Why Is Trump Using Tariffs?
Trump says tariffs:
- Increase government revenue
- Encourage the purchase of American-made goods
- Boost domestic investment
He also argues that the US has been “exploited by cheaters” through unfair trade practices.
Tariffs have been used to push other political objectives. For example, tariffs on China, Mexico, and Canada have been linked to stopping illegal migration and fentanyl trafficking.
Some announced tariffs have been amended or delayed following negotiations.
Legal Challenges
Trump’s tariffs bypassed Congress using the 1977 International Emergency Economic Powers Act, prompting legal challenges.
- In August 2025, a US appeals court ruled most tariffs illegal but left them in place.
- The White House appealed to the Supreme Court, which began hearing arguments in November 2025.
- Trump has warned that overturning the tariffs would create a “complete mess” and take years to resolve refund claims, adding: “WE’RE SCREWED.”
Tariffs on Individual Countries
Negotiations continue with major trading partners, including China, Canada, and Mexico:
- China: Tariffs once threatened to exceed 100%, but parts were suspended after a truce. Exemptions for 178 Chinese products run until 10 November 2026.
- Canada: Faces 35% tariffs on most goods, plus 50% on metals and 25% on non-US cars, though many are exempt under USMCA. A proposed 10% increase followed an anti-tariff ad.
- Mexico: Faces 30% tariffs, plus sector-specific levies and a 25% fentanyl tariff; exemptions apply under USMCA.
Other countries face varying tariffs under the April 2025 baseline 10% policy, with higher rates for “worst offenders”:
- India: 50% (including 25% for trade with Russia)
- Brazil: 50%
- South Africa: 30%
- Vietnam: 20%
- Japan, South Korea, EU: 15%
On 13 January, Trump added 25% tariffs on countries continuing trade with Iran after its crackdown on protests.
UK Tariff Deal
The UK negotiated a 10% tariff, the lowest for any country under Trump, applying to the first 100,000 vehicles exported annually. Additional vehicles face 25% tariffs.
The agreement also allows:
- Trade in beef
- Reduced tariffs on US ethanol
- Steel and aluminum tariffs remain at 25%, with full removal on hold
Products Specifically Targeted
Some tariffs apply to specific products regardless of origin:
- 100% on branded or patented drugs (unless produced in the US)
- 50% on steel, aluminum, copper, cabinets, and some furniture
- 25% on cars, engines, and heavy-duty trucks
Trump also ended the $800 duty-free exemption, affecting millions of low-cost online parcels, including from Shein and Temu.
Some food tariffs, including pasta, avocados, bananas, beef, and coffee, were reduced or exempted due to domestic supply limitations.
Impact on US Consumers
Shoppers have seen price rises on toys, appliances, furniture, and some food items. Retailers such as Target, Walmart, and Adidas have passed on costs.
Domestic goods made with imported components are also more expensive—for example, car parts that cross multiple borders during assembly.
US inflation rose to 3% by September 2025, down to 2.7% in November and December, slightly below analyst expectations.
Effect on Global and US Economies
Trump’s tariffs initially shook global markets. The IMF reports:
- Global growth: 3.2% (2025), 3.1% (2026)
- US growth: 2% (2025), 2.1% (2026)—down from 2.8% in 2024, but still fastest among advanced economies
The US economy grew 4.3% annualized in Q3 2025, up from 3.8%, driven by consumer spending and exports, while imports continued to decline.
