The 2025 Global Trade War: U.S. Tariffs and Global Reactions
The year 2025 has witnessed pivotal developments in global trade, especially following the start of U.S. President Donald Trump’s second term. With it came radical changes in international trade relations. The imposed customs tariffs triggered sanctions and retaliations, shaking global supply chains.
I. Reasons for the Trade War and the U.S. Administration’s Justifications
The trade war initiated by the Trump administration in 2025 was driven by both economic and political motivations. Official discourse emphasized the principle of “reciprocity” and the determination to counter unfair trade practices. President Trump asserted that the U.S. had been exploited by its trade partners for years and had granted unilateral concessions; tariffs were introduced to end this imbalance. The new tariffs were framed as “reciprocal taxes,” emphasizing that the U.S. was merely imposing duties equivalent to those applied by others.
Another justification was the aim to reduce the U.S. trade deficit. Trump and his team highlighted that large deficit with countries like China, Mexico, and Germany harmed American prosperity. Tariffs were presented as a strategic tool to address this. Encouraging domestic production particularly in sectors such as steel and semiconductor and generating billions in daily revenue for the treasury were among the stated goals.
Trump also viewed China not only as an economic competitor but also as a geopolitical threat. Measures such as export restrictions and tariffs targeting companies like Huawei were part of efforts to slow China’s technological advancement. These policies also signaled an ideological shift.
The administration defended the tariffs on grounds of national security. For example, the 25% duties imposed on Canada and Mexico were linked to these countries’ alleged failures in curbing illegal immigration and drug trafficking. The White House cited border security weaknesses and the influx of substances like fentanyl as legitimate reasons for tariffs.
These trade wars quickly produced major diplomatic consequences. The announcements caused volatility in financial markets worldwide, triggered a risk averse climate, and disrupted corporate decision-making processes. Consumer confidence declined, and pricing became increasingly difficult.
In the medium term, the wars forced a reconfiguration of global supply chains. Companies that had relied on the “just-in-time[1]” production model were hit hard by increased import costs. German auto giants, for instance, had production lines in Europe and Mexico geared toward the U.S. market. Tariff changes affecting both the EU and Mexican imports placed these firms under significant cost pressure. This new era of trade competition shook not only national economies but also multinational production and distribution networks.
II. U.S. Tariff Initiatives
Starting in early 2025, the U.S. reshaped its trade strategy through aggressive tariffs. On February 1, it imposed 25% duties on all goods from China, Canada, and Mexico, and 10% on energy imports. On February 4, an additional 10% duty was applied to imports from China, and the “de minimis[2]” exemption for items under $800 was revoked.
On April 2, Trump announced a 10% “Liberation Day” tariff on all imports over $800. From that day forward, a flat 10% base tariff would apply to all imports. Foreign vehicles were subjected to a 25% duty. However, only a 10% duty was set for goods imported from Turkey and the United Kingdom. Chinese products faced a 34% duty, while the EU was subject to a 20% tariff. Trump also announced that products from Mexico covered under the USMCA would be exempt from tariffs, including a temporary exemption for auto parts. On April 9, country-specific tariffs were suspended for 90 days, and a universal 10% rate was applied. Duties on Chinese goods were raised to 84%.
The new package became a near-global series of tariffs, affecting over 180 trade partners at different rates. Turkiye and the U.K. were placed in the lowest bracket at 10%. The EU faced 20%, Japan 24%, China 34%, and some countries up to 49%.
III. China’s Harsh Retaliation
On March 4, China announced a 34% tariff on all U.S. goods, increasing this to 84% on April 9 and to 125% on April 11. Products from Hong Kong and Macau were subjected to up to 145% tariffs. China also restricted exports of rare earth elements and imposed sanctions on 30 U.S. defense companies. It filed a case with the WTO, labeling the U.S. measures as “unilateral bullying.[3]”
IV. The European Union’s Cautious Approach
Initially, the EU chose to delay retaliatory tariffs. A 25% tariff planned for April 1 was postponed for 90 days. However, by April 13, the EU began preparing a broader tariff package. Starting that month, an additional 20% duty was applied across the board.
U.S. tariffs on EU products targeted sectors like automotive, steel, machinery, and pharmaceuticals. The EU planned retaliatory tariffs on about €26 billion worth of American goods, including bourbon and agricultural products. Trump threatened to impose 200% tariffs on European alcoholic beverages. The EU began preparing a legal case at the WTO.
V. Responses from Canada and Mexico
Canada swiftly responded to U.S. tariffs enforced on March 4 by introducing a 25% duty on certain U.S.-made vehicles. Mexico initially took a wait-and-see approach. Then, on March 6, Trump announced that products covered by the USMCA would be exempt from tariffs. This affected about 50% of imports from Mexico and 38% from Canada. Although the exemption was originally set to expire on April 2, the U.S. later declared it would be indefinite. Soon after, however, comprehensive tariffs were introduced on steel, aluminum, and automotive imports from all countries, including Mexico and Canada.
Trump stated that the goal was to reduce trade deficits with both neighbors, force stronger border control measures particularly against illegal immigration and fentanyl trafficking and boost domestic production. Yet Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau criticized the tariffs as unjust and contrary to USMCA rules. Trudeau even accused Trump of using the tariffs as a coercive tool for annexation. Economists warned the measures would disrupt trilateral trade, damage supply chains, and drive-up consumer prices.
VI. Türkiye’s Measured Stance
While the U.S. tariffs significantly disrupted global trade balances, they presented both new opportunities and risks for Türkiye. The high tariffs on China and some Asian nations positioned Türkiye as an alternative supplier to the U.S. market.
Türkiye was not subject to additional tariffs, and the general rate remained at 10%. Compared to some Asian producers, Türkiye gained a cost advantage in exports to the U.S. The competitive edge of Turkish industries especially textiles, automotive parts, packaging, food, and household goods increased.
Despite this seemingly advantageous position, the impact must be assessed sector by sector. Although Türkiye has the potential to gain in certain areas, occasional additional tariffs imposed by the U.S. and limitations in infrastructure could hinder sustainable gains. Therefore, effectively capitalizing on these opportunities requires careful evaluation of production capacity and sectoral preparedness.
VIII. Conclusion and Assessment
The year 2025 will be remembered as a turning point in the U.S.’s global trade policy. Protectionist economic measures not only reshaped the American economy but also sent shockwaves across the world. China’s swift retaliations, the EU’s cautious but strategic response, and Canada’s firm opposition were among the most notable developments. The effects of the trade war extended beyond tariffs, influencing strategic minerals, defense sanctions, and postal systems. The outcome of future negotiations in the coming months will further clarify the global trade landscape.
[1] Just-in-time is a method used to organize production, and its main goal is to ensure that materials arrive at the factory exactly at the moment they are needed for use. In short, it means that the company receives raw materials in the required amount and at the right time for its production activities.
[2] De minimis refers to a threshold value set by different countries; when goods are valued below this threshold, they can be imported without any taxes or duties.
[3] Forbes Türkiye. “Çin’den ABD’ye İlk Tepki: Tipik Bir Tek Taraflı Zorbalık Uygulaması.” Forbes Türkiye, https://www.forbes.com.tr/makale/cin-den-abd-ye-ilk-tepki-tipik-bir-tek-tarafli-zorbalik-uygulamasi. Accessed 24 April 2025.
