Crash Course:Trump’s Tariff Playbook

In April 2025, former President Donald Trump, campaigning for a return to office, launched an aggressive trade agenda that economists have described as unprecedented in the modern era (AP News, 2025). Invoking the International Emergency Economic Powers Act (IEEPA), Trump imposed a flat 10 percent tariff on nearly all imports, affecting goods from both allies and adversaries. Subsequent measures introduced even steeper, country-specific and sector-specific tariffs, stoking concerns of a global trade confrontation (Trade Compliance Resource Hub, 2025).

A 10 Percent Wall Around the U.S. Economy

On 2 April 2025, Trump unveiled the “Liberation Day” tariffs: a 10 percent levy on almost all imported goods. These took effect on 5 April. A second wave, described as “reciprocal tariffs,” followed on 9 April, targeting countries with significant trade surpluses against the United States (Reuters, 2025).

Copper imports are now subject to a 50 percent tariff, effective 1 August (Fox Business, 2025). Steel and aluminium tariffs doubled to 50 percent on 4 June, impacting over 40 billion U.S. dollars in annual trade (Washington Post, 2025). Imported automobiles now face a base tariff of 25 percent, although allied nations may qualify for tiered exemptions. For example, the United Kingdom secured a 10 percent rate on the first 100,000 vehicles exported annually. The full 25 percent rate applies to any exports beyond that threshold (Reuters, 2025).

Pharmaceuticals and semiconductors are now subject to tariffs ranging from 25 to 200 percent, depending on origin and trade deal status. Chinese active pharmaceutical ingredients (APIs) and Indian generics face 150 percent duties unless bilateral agreements are finalised before 1 August (Trade Compliance Resource Hub, 2025).

Economic Impact: Surging Revenues, Rising Prices

As of 25 July 2025, the federal government has collected more than 150 billion U.S. dollars in tariff revenue. In July alone, tariffs generated 27.8 billion dollars, compared to 7.9 billion in January. This represents an increase of 252 percent (Fox Business, 2025).

However, inflationary pressures are intensifying. Economists at Moody’s Analytics estimate that the new tariffs could add between 1.2 and 1.8 percentage points to the Consumer Price Index by the end of 2025 (Moody’s Analytics, 2025). According to the Tax Foundation, the average American household is expected to pay an additional 1,200 to 1,500 dollars annually due to elevated import costs (Tax Foundation, 2025).

Food prices have been particularly affected. In 2024, the United States imported 221 billion dollars’ worth of food products. Of these, 74 percent are now subject to new tariffs (U.S. Bureau of Economic Analysis, 2024). Starting in August, staples such as rice, sugar, cheese, and fish will face tariffs exceeding 30 percent. As a result, retail food prices have already risen by 7.4 percent year on year (USDA, 2025).

Sectoral Breakdown: From Farms to Factories

The agricultural sector has been among the hardest hit. In the second quarter of 2025, U.S. agricultural exports fell by 16 percent after China, India, and Brazil imposed retaliatory tariffs of 35 percent on soybeans, 40 percent on poultry, and 30 percent on dairy (American Farm Bureau, 2025). Meanwhile, machinery and fertilisers used by American farmers have become 22 percent more expensive than they were a year ago (USDA, 2025).

In manufacturing, the automotive industry has reported a 9 percent increase in production costs since April. Major manufacturers such as Ford and General Motors rely heavily on supply chains in Mexico, Canada, and East Asia. These regions are now subject to tariffs at varying levels (Reuters, 2025).

Consumer electronics are similarly affected. More than 70 percent of smartphones and 85 percent of laptop components are sourced from Asia. Since April, retail prices for electronics have climbed by 11.3 percent (Consumer Technology Association, 2025).

Retaliation and Geopolitical Blowback

India was hit with a 25 percent penalty tariff beginning 1 August, along with a secondary surcharge tied to its continued oil imports from Russia (AP News, 2025). Brazil is facing prospective tariffs of 40 to 50 percent and has already announced retaliatory duties of 30 percent on U.S. medical devices and agricultural inputs (Washington Post, 2025).

Nations without bilateral trade agreements, including Indonesia, the Philippines, and South Korea, now face a “world tariff” of 15 to 20 percent. By contrast, countries that have secured deals, such as the European Union, the United Kingdom, and Japan, enjoy preferential rates of 10 to 15 percent on most goods (Reuters, 2025).

The World Trade Organization has received formal complaints from at least eight member nations. Both Canada and Mexico have objected to the imposition of 25 percent tariffs on non-USMCA goods, which were applied retroactively from February (WTO, 2025).

Legal Challenges and Constitutional Tensions

On 28 May 2025, the U.S. Court of International Trade issued a landmark ruling in V.O.S. Selections, Inc. v. United States, declaring the use of IEEPA to enact peacetime tariffs unconstitutional (U.S. Court of International Trade, 2025). The court granted a permanent injunction. However, the Trump administration has appealed. As of July, the injunction has not been stayed, but its enforcement remains contested and politically fraught.

High Stakes in an Election Year

Trump’s sweeping tariff regime may resonate with voters who favour economic nationalism, but its broader implications are increasingly evident. Inflation is accelerating, trade alliances are under strain, and legal uncertainty continues to cloud the policy’s future. Whether this approach succeeds in reshoring jobs or merely raises living costs will become clearer in the months ahead.