The trade war launched this year by US President Donald Trump generated uncertainty in markets and companies, reducing the purchasing power of Americans, raising tension between China and the US and putting the system that governed international trade for decades on the ropes.
The Republican leader, who already implemented protectionist measures during his first term (2017-2021), announced on April 2 a battery of tariffs with the argument of reversing the trade balance with other countries, increasing revenue and ensuring that relocated factories returned to the US.
That day, the White House imposed tariffs on more than 180 countries, many of them friends and allies of Washington: a generalized 10% tax and additional rates, wrongly called “reciprocal,” especially high on those countries with a large trade surplus with the United States.
After several days of turbulence in the financial markets, Trump backed down: he froze the additional tariffs and opened a negotiation period that culminated in agreements with several of the world’s main economies. The US agreed to leave the final tariffs at around 10% in exchange for concessions.
In the case of the European Union, for example, the purchase of gas and oil from the United States, in addition to making important investments in that country. In Japan, open its market to more American agricultural products and make million-dollar investments in the United States, in sectors such as energy, semiconductors and shipbuilding.
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Tariff escalation with China
With China, the situation followed a different path: the 34% rate imposed by Washington on April 2 was immediately contested by Beijing, which generated a tariff escalation that ended up placing US tariffs on Chinese products at 145% and China’s tariffs on US imports at 125%.
After multiple rounds of negotiations and a meeting between Trump and Chinese President Xi Jinping, the world’s first and second economies reached a tariff truce that currently places the average US tax on Chinese products between 29 and 48% and the percentage with which Beijing taxes US goods at around 30–35%.
Experts agree that the truce only postpones the underlying problem. Julian Evans-Pritchard, of the British consultancy Capital Economics, maintains that with the agreement, Beijing gains time again “to decouple at its own pace”, but doubts that it will prevent the world from continuing to “fracture into two rival blocs centered on China and the United States.”
Along the same lines, the senior economist for Asia at Cesce Research, Rafael Loring, emphasizes that the clash between both powers is not only about tariffs, but also a reflection “of deep structural imbalances and divergent economic models.”
Although a total decoupling would be “extremely harmful to both parties,” China has important advantages – including its role in global supply chains, a competitive workforce and a huge scale of production – to successfully sustain a protracted trade conflict, he points out in an article in the journal Política Exterior.
The Washington-Beijing fray continues to lead, according to international organizations or central banks, to lower growth, greater inflationary pressures and a reconfiguration of global supply chains.
Precisely due to tariff tensions, the World Trade Organization (WTO) this October lowered the forecast for global trade growth for 2026, placing it at 0.5% compared to the 1.8% previously forecast.
The Director General of the WTO, Ngozi Okonjo-Iweala, recognizes that the multilateral trading system “is going through its most difficult moment in 80 years”, but defends that it remains “resilient” and essential for the stability of the global economy.
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Tariffs as a political tool
The White House used tariffs not only for economic purposes, but as a tool of political pressure. Trump applied them against China for fentanyl, against Mexico for irregular migration, against India for buying Russian oil and against Brazil for the prosecution of former president Jair Bolsonaro, a Trump ally.
Although the rapprochement between the president of Brazil, Luiz Inácio Lula da Silva, and Trump deactivated the tariff punishments on the largest economy in Latin America, no one is aware that this relief is also due to the impact of the trade war on the rise in prices in the US.
Jerome Powell, president of the Federal Reserve (Fed), attributed the persistence of inflation at around 3% to the tariffs, which, he added, deteriorates the purchasing power of Americans, who have already punished Trump in the local and state elections held since November.
The reductions in tariffs on beef, coffee or fruits from Brazil were joined by others on foods from Latin American countries related to the Trump Administration, such as Argentina, El Salvador, Ecuador or Guatemala in an attempt to contain prices in the shopping basket, the main battlehorse in this final stretch of the year ahead of the mid-term elections in November 2026.
Added to this is a potentially chaotic scenario in the event that the Supreme Court considers that a large part of the tariffs imposed by Trump were implemented illegally, which would force Washington to reimburse exporting entities between 140,000 million and one trillion dollars, according to different estimates.
With information from EFE
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