It’s been months since the Trump administration first started threatening massive tariffs against a number of countries. First it was the threat of tariffs on all aluminum and steel exported to the United States. Then it was the separate threat against China specifically, expected to affect billions’ worth of Chinese exports of a list of goods including flat-screen televisions. And then, in recent weeks, those threats started to materialize into real policies costing real money. After granting some exemptions for allies, Trump let the aluminum tariffs go into effect on the European Union, Mexico, and Canada at the beginning of last month. But the ones that just landed on China are the biggest yet by value—and there may be more to come.
The new U.S. tariffs affect $34 billion worth of goods from China, which has retaliated with its own penalties on American exports. Trump is now fully embroiled in a multifront trade war in which the combatants include both close U.S. allies and rivals—all in the service of what Trump characterizes as a more equitable global trading system. Mainstream economists and trade experts, meanwhile, say tariffs are hardly an effective way to address inequities in trade, and they may hurt consumers and manufacturers by making imported goods and their component parts more expensive.
Yet tariffs are President Trump’s chosen prescription as he takes on America’s largest trading partners in a battle that could have broad consequences for American companies, farmers, and consumers—not to mention the entire global economy. Each of the countries Trump has targeted so far has retaliated with its own tariffs on U.S. imports. And those measures have specifically targeted U.S. industries in politically consequential states. What follows is a list of the major fronts in Trump’s ongoing trade war, and the blows struck so far:
Last month, Trump threatened 25 percent tariffs on $50 billion worth of Chinese goods in hopes, he said, of “preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.” That $50 billion amount was split into two rounds: $34 billion that went into effect Friday and $16 billion at a later date.
The U.S. tariffs target Chinese imports of machinery, auto parts, and medical devices. For now, these tariffs won’t have much of an impact on consumers; they will affect manufacturers who will have to pay a higher price for imports of, for example, components needed in automobiles.
But that could change—quickly. Days after announcing last month that he would target $50 billion worth of Chinese goods, Trump threatened a further $400 billion of Chinese imports with tariffs. That is nearly the total amount of goods the U.S., the world’s largest economy, buys from China, the world’s second-largest economy.
The U.S. hopes that by threatening China, its second-largest trading partner after the EU, it can persuade the Chinese government to come to some sort of agreement with the Trump administration on trade. After all, China bought $115.6 billion worth of U.S. goods in 2016, according to the United States Trade Representative. That means that Beijing can impose proportional tariffs on U.S. imports for only so long.
But the Chinese tariffs are being directed at some of the largest U.S. sectors, including agriculture. Soybeans, SUVs, and whiskey are specifically being targeted. One soybean farmer told The Wall Street Journal he was already losing money—tariff fears have driven down the price of soybeans to such an extent that he told the paper $100,000 of the value of his crop had “disappeared into thin air.”’ The U.S. exported $20 billion worth of agricultural products to China last year; more than half of that amount came from soybean sales. In the lead-up to Friday’s retaliatory tariffs, which would make U.S. soybeans more expensive within China, Chinese companies had begun turning to Brazil for their supplies.
Unless the two sides come to an agreement quickly, other major U.S. industries, including pork producers, who rely heavily on Chinese demand, will lose billions of dollars when China carries out its threat to target the U.S. pork industry for tariffs.
Last month, Trump imposed 25 percent tariffs on steel and 10 percent tariffs on aluminum imports from Canada, its third-largest trading partner after the EU and China. The levies were directed at goods worth about $12.5 billion. The U.S. steel tariffs, in particular, hurt Canada, the largest exporter of steel to the U.S. Last week, Canada responded with its own tariffs—worth an equal amount—targeting, among about 80 items, American steel, aluminum, coffee beans, and maple syrup. An analysis by the Peterson Institute for International Economics noted that the “tariffs will be costly for Canadian consumers,” but that by targeting U.S. steel and aluminum for retaliation, Canada “will strike a second blow for much of the U.S. aluminum industry that had already stated discontent with the Trump administration's tariffs.”
The dispute over tariffs hangs over the renegotiation of the North American Free Trade Agreement, which also involves Mexico.
Mexico, the fourth-largest U.S. trading partner, was slapped with 25 percent tariffs on its steel imports to the U.S. Mexico struck back almost immediately, targeting U.S. steel, pork, and other products from states that are Republican strongholds. Many of these same industries are also being targeted by China and the EU—which are similarly sensitive to the geography of U.S. politics—putting an additional financial burden on them. The idea, presumably, is to pressure businesses and lawmakers in those states to press the administration on its trade policies. So far, despite pressure, there has been no change in the administration’s approach.
Last month’s tariffs on steel and aluminum imports also targeted the EU. In response, the EU slapped $3.4 billion worth of tariffs on bourbon, orange juice, Harley-Davidson motorcycles, and other items. The goal was to target iconic American products in states governed by Republicans. An EU official said the “United States is losing more because it has put tariffs on a very important input [steel and aluminum] which very often it doesn’t produce itself. The EU perhaps will find a few disgruntled consumers who have to pay more for their Harley-Davidsons, but that is not a big loss for us.”
Trump has also vowed, but hasn’t yet acted, to impose a 20 percent tariff on European-made cars, a levy that would disproportionately affect German automakers for whom the U.S. is a top market. Trump has complained that the U.S. at present puts a 2.5 percent tariff on European imports while the EU has a 10 percent tariff on foreign-made cars. Handelsblatt, a German financial publication, reported Thursday that the U.S. envoy to Berlin had proposed to German auto executives a resolution to the issue, involving each side adopting zero tariffs, though it is unclear whether such a solution is acceptable to the EU as a bloc.