- 01
- Aug.
- 2025
Tariffs have once again taken center stage in American trade policy. On Thursday, the White House announced a major overhaul of customs duties, marking a new chapter in President Donald Trump’s protectionist agenda.
In an official statement, the White House emphasized that these measures aim to “protect American workers” and to “secure reciprocal and balanced trade relationships” following decades of trade deficits deemed “unsustainable” for the US economy and national security.
At its core, this policy relies on a straightforward principle: by increasing the cost of imports, Washington aims to incentivize companies to relocate production back to the United States and reinvest in domestic industries.
Massive and Targeted Tariff Increases
Since April 2, Donald Trump has initiated a series of tariff hikes, starting with a baseline 10% tariff applied to all imports except for a few explicitly exempted countries, while imposing additional surtaxes of up to 50% were imposed on most targeted trade partners.
On Thursday, the administration escalated the measures further: nearly 70 countries now face heightened tariffs, with duties reaching as high as 41% for some.
Canada, a neighboring country and longtime ally, saw its tariff rate jump dramatically from 25% to 35%. The White House justifies these actions on both economic and security grounds, citing chronic trade deficits as a “threat” to American industrial defense.
Some of these decisions also carry political weight. Trump publicly linked the sanctions on Canada to Prime Minister Mark Carney’s support for the recognition of a Palestinian state at the United Nations last September. “That will make it very difficult to reach a trade deal with them,” he wrote on Truth Social, underscoring how tariffs are increasingly used as diplomatic leverage alongside economic policy.
Conversely, some countries have secured preferential treatment after intense negotiations.
Japan and the European Union agreed to accept a base tariff of 15% and to conclude broad investment agreements.
According to the White House, the EU committed to purchasing $750 billion worth of American energy and investing an additional $600 billion in the US by 2028, while Japan pledged $550 billion in investments.
Shaking the Foundations of Global Trade
The recent wave of tariff hikes marks a direct assault on the post–World War II international trade system.
“There’s no question: the executive order and the string of recent trade agreements are ripping up the rulebook that has governed global commerce since World War II,” emphasizes Wendy Cutler, vice president of the Asia Society Policy Institute, in comments reported by AFP.
Under this new framework, the White House has adopted a transactional, tit-for-tat strategy: countries that agree to negotiate gain reduced tariffs and expanded access to the US market, while those resisting face harsh penalties.
The executive order signed by Donald Trump even includes a 40% surtax on goods rerouted through third countries in attempts to sidestep US tariffs.
The updated tariff schedule reflects a highly tailored approach: Switzerland now faces a 39% rate, Taiwan’s dropped to 20% from 32%, and Cambodia and Thailand will see duties of 19%, well below the originally proposed 49% and 36%.
As for China, it has been granted a temporary reprieve. Unless both sides agree to renew their tariff truce by August 12, rates could once again surge, risking a full-scale trade escalation between the world’s two largest economies.
Tariffs at the Heart of Trump’s Economic Doctrine
For Donald Trump, tariffs are more than a trade lever, they are a cornerstone of his economic and political vision.
The White House highlights tangible results: a surge in investments, the return of industrial projects and the promise of manufacturing jobs in regions long ravaged by deindustrialization.
Supporters of this policy point to a significant increase in tariff revenues and argue that ongoing reshoring efforts will strengthen supply chain resilience and national security.
The administration has also taken an openly strategic stance—urging foreign companies to bypass tariffs by relocating production to US soil, and promising “fast and professional” support to ease their establishment.
Yet the risks are considerable. According to the American Enterprise Institute (AEI), the formula used by the administration to calculate so-called “reciprocal” tariffs contains a fundamental flaw—one that multiplies the justified rates by a factor of four. Correcting the calculation would bring most surcharges down to between 10% and 14%, far below the 25% to 50% rates publicly announced.
This miscalculation has fueled uncertainty. Following the April announcement, the S&P 500 fell by 9%, and economists adjusted the likelihood of a recession upward. Rather than boosting US competitiveness, AEI warns, these tariffs could end up undermining it.
Tariffs are therefore no longer a simple fiscal instrument or trade regulation tool: they have become the central axis of an American economic diplomacy that combines domestic politics, industrial strategy and geopolitical power dynamics.
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