As Donald Trump unleashes a trade war, here is how the world is responding

President Donald Trump's tariffs on China, India, Canada, Mexico, and the European Union have intensified global trade tensions, prompting swift retaliation and raising fears of economic instability

Upon assuming office, US President Donald Trump announced significant reciprocal tariffs on key trading partners, including India, Mexico, Canada, China, and the European Union (EU), intensifying global trade tensions. In his first joint address to Congress on Wednesday, Trump acknowledged that these measures might cause “a little disturbance” in the economy but emphasised their necessity to protect industries and jobs in the US.

 

“They’re about protecting the soul of our country. Tariffs are about making America rich again and making America great again. And it’s happening. And it will happen rather quickly. There’ll be a little disturbance, but we are okay with that. It won’t be much,” he said.

 

 

He reiterated that other countries have imposed tariffs on the US for decades, and it is now their turn to face them. “Other countries have used tariffs against us for decades, and now it is our turn to start using them against those other countries. On average, the European Union, China, Brazil, India, and countless other nations charge us tremendously higher tariffs than we charge them; it is very unfair,” Trump said during his address to Congress.

 

The tariff on Chinese imports was increased from 10 per cent, effective February 4. He announced an additional 10 per cent tariff to be imposed from March 4, further straining relations between the world’s two largest economies.

 

He enforced a 25 per cent tariff on imports from Mexico and Canada, effective March 4, marking a substantial escalation in trade barriers.

 

He said the tariffs on India would be implemented from April 2. “On April 2, reciprocal tariffs kick in, and whatever they tariff us, other countries, we will tariff them… whatever they tax us, we will tax them.”

 

Additionally, a 25 per cent tariff will be imposed on all aluminium and steel imports starting March 4. Unspecified tariffs on all agricultural products and all foreign cars will come into effect from April 2.

 

Why is Donald Trump doing this?

 

Defending his decision to impose tariffs on India, Trump stated, “India charges us auto tariffs 100 per cent. The system is not fair to the US; it never was.”

 

Trump’s tariff measures against Mexico, Canada, and China have been presented as efforts to combat illegal immigration and drug trafficking. However, not everyone supports this reasoning.

 

His directive on China alleges that the Chinese government provides a “safe haven” for criminal networks engaged in laundering proceeds from illegal synthetic opioids.

 

Trump supports these tariffs, believing they will enrich the US despite concerns from experts regarding an increase in consumer and business costs. According to various media reports, the imposition of these tariffs has led to heightened volatility in global markets, with significant declines in major stock indices and fluctuations in currency values.

 

How countries are responding to Trump’s tariff policy

 

India

India is closely monitoring the situation due to its significant trade relations with the US. Indian officials have expressed concerns about the potential for a global trade war and its impact on emerging economies. The government is assessing strategies to mitigate any adverse effects on its economy, according to the Ministry of External Affairs.

 

China

China retaliated by imposing 15 per cent tariffs on US agricultural imports, including chicken and wheat, and 10 per cent on products like soybeans and pork. The commerce ministry announced plans to take legal action against the US at the World Trade Organization (WTO), challenging what it described as a “wrongful practice.” It also stated that countermeasures would be implemented to protect its interests. In a post on X, the Chinese Embassy in the US stated, “If war is what the US wants, be it a tariff war, a trade war, or any other type of war, we are ready to fight till the end.”

 

Canada

 

In response to Trump’s tariff, Canadian Prime Minister Justin Trudeau announced a matching 25 per cent tariff on $155 billion worth of US goods. Trudeau urged Canadians to support domestic products, stating, “Now is the time to choose products made right here in Canada. Check the labels. Let’s do our part. Wherever we can, choose Canada,” he said in a post on X.

 

Mexico

 

Mexican President Claudia Sheinbaum instructed the economy minister to implement both tariff and non-tariff measures, which are expected to include a 25 per cent tariff on American imports.

 

European Union

 

The EU issued a strong warning to Trump, pledging decisive action if he proceeds with tariffs on EU goods.

 

According to media reports, experts believe that escalating trade tensions between the US and its key trade partners signal a potential shift in the global economic landscape. As countries from India to Canada retaliate with their own measures, fears of a full-scale trade war grow, with stakes higher than ever before.