One year of Trump's Liberation Day tariffs: Who struck deals, who resisted

A year after it was announced, 'Liberation Day' has altered the mechanics of global trade as tariffs have succeeded in forcing negotiations in some cases and reshaping supply chains in others

This day last year, US President Donald Trump stood in the White House Rose Garden and declared what he called “Liberation Day”, a reset of how the United States would engage with global trade. The pitch was simple but disruptive for global trade as Trump decided that tariffs would no longer be defensive tools, but bargaining weapons. 

The Trump administration framed the move as a response to persistent trade deficits and what it described as unequal market access. Tariffs, the US President argued, would force trading partners back to the negotiating table and deliver better terms for American industry. 

A year later in 2026, the test is no longer political but more empirical, rooted in data. Did countries concede? Did supply chains shift? Did the policy isolate China? 

 

The answer appears complex as different regions responded in different ways by using methods of negotiation and resistance, while everyone adapted, producing a fragmented outcome rather than a single new trade order.

What was announced on April 2, 2025?

The Liberation Day policy combined a universal tariff with targeted country-level penalties. A baseline duty of around 10 per cent was imposed on most imports, while additional “reciprocal” tariffs were calculated for specific countries based largely on their trade surpluses with the US. 

These additional tariffs varied widely. Major trading partners including the European Union, China and India faced significantly higher rates than the baseline. For China, the escalation was immediate. A 34 per cent tariff was added on top of an existing 20 per cent duty, pushing baseline rates above 50 per cent. 

Within days, this spiralled. US tariffs on Chinese goods eventually reached as high as 145 per cent, with China responding with duties up to 125 per cent on US exports. 

India faced 25 per cent reciprocal tariffs, followed by an additional 25 per cent penalty linked to Russian oil purchases, taking total duties on some exports to around 50 per cent. 

On the other hand, the European Union was faced with tariffs ranging from 20-25 per cent on key exports. 

But despite the sudden imposition of tariffs, there was room for negotiations as some of the tariffs were to be implemented later, thereby creating a window for countries to seek exemptions through bilateral talks.

How did Europe respond to tariff pressure?

Europe’s initial response was sharp and signalled retaliatory measures were on the cards. 

The EU prepared countermeasures covering roughly $28 billion worth of US exports, signalling a willingness to escalate. But escalation gave way to negotiation within months. 

By mid-2025, the US had announced deals with multiple partners, including the EU. These were not full trade agreements but sector-specific arrangements covering industrial goods, investment commitments and tariff adjustments. 

But even then, friction continued as Washington continued to impose tariffs on selected products such as wind turbines and motorcycles after initial agreements, prompting the European Parliament to add safeguard clauses and review mechanisms to the deal in March this year. 

Trade data reflects this uneasy equilibrium. EU exports to the US spiked in Q1 2025 (trade surplus €81 billion), then fell sharply, with Q2 down €36 billion, Q3 further to €130 billion, Q4 to €115.3 billion (surplus €31 billion). UK food exports like whisky slumped in H2 2025 due to higher prices, according to a Bloomberg report. 

However, despite post-tariff drops, the US trade deficit in goods with the EU declined by just 7 per cent in 2025, according to a study released in March by the American Chamber of Commerce to the European Union.

Why did the China conflict remain unresolved?

If Europe moved toward de-escalation, China moved the other way. The US-China trade relationship remained the most volatile throughout the year. 

After the initial 34 per cent reciprocal tariff, US duties on Chinese goods rose as high as 125 per cent following Beijing’s retaliation. China retaliated with rare-earth export controls, port fees, and antitrust probes on US firms like Qualcomm. By August, a 90-day truce paused triple-digit duties. 

Temporary reductions in tariff rates were agreed at different points during the year, aimed at stabilising markets and creating space for dialogue. But these were limited in scope and duration. 

But it is with China that Trump’s tariff appears to have extracted the most visible shift. According to a Wall Street Journal report, US imports from China have fallen significantly. Post the tariff rule, only about $9 out of every $100 of US imports came from China last year, down from over $20 in 2018. 

US imports from China halved by mid-2025 from prior peaks, hitting 2009-crisis lows, as Chinese exporters rerouted via Southeast Asia and Mexico. However, China still posted a record $1 trillion-plus global trade surplus by late 2025.

How did India respond to tariff pressure?

India took a more calibrated path. The country faced reciprocal tariffs of around 25-26 per cent under the framework, along with additional pressure of up to 50 per cent linked to its continued purchases of Russian oil. 

Unlike China, India did not opt for direct confrontation. Instead, it engaged with the US through negotiations during the tariff pause period, focusing on preserving market access while managing sector-specific vulnerabilities. 

In absolute terms, exports to the US fell sharply in the first six months after April 2025, declining 15-20 per cent, with sectors such as textiles down about 10 per cent. But the trend reversed toward the end of the year as exports rose 14.5 per cent in October and 20 per cent in November. 

In February this year, a trade agreement between New Delhi and Washington was reached to help stabilise flows. The US reduced tariffs to 18 per cent, saying India will halt purchases of Russian oil, remove select duties, and commit to higher imports from the US. India confirmed the development, though it did not explicitly admit to the details shared by the US. A detailed framework of the trade agreement is still in works.

Why did Southeast Asia benefit from tariff shifts?

While large economies were negotiating or resisting, Southeast Asia experienced indirect gains. As tariffs reshaped cost structures, companies adjusted supply chains, shifting sourcing and manufacturing to countries with lower exposure to US duties. 

Asean countries like Vietnam, Thailand, and Malaysia, which faced only 11-15 per cent duties, saw US-bound exports surge 23 per cent year-on-year by late 2025, even outpacing China's declining share. This shift was driven less by policy changes in those countries and more by the reconfiguration of global trade flows. 

However, the gains were not without complications. US authorities began scrutinising transshipment practices, where goods are routed through third countries to avoid tariffs. Additional enforcement measures and targeted tariffs followed in some cases.

What 'Liberation Day' looks like one year later

A year after it was announced, “Liberation Day” has altered the mechanics of global trade, but not in a uniform direction. 

Tariffs have succeeded in forcing negotiations in some cases and reshaping supply chains in others. But they have also prolonged disputes, particularly with China, and introduced new layers of complexity into global commerce.