On April 2, 2025, President Trump announced a minimum 10% additional tariff on all US imports—and higher additional tariffs on imports from 57 countries, notably China. The announcement of these so-called “reciprocal tariffs” prompted retaliation from trade partners and triggered a stock market crash. After 80 years of progressive trade liberalisation aimed at fostering global economic growth, the move by President Trump has struck a severe blow. There is little doubt that the main focus of the so-called Trump tariffs is China, the world’s largest exporter and the world’s second largest economy. President Trump has stated and repeated that he expects China to “eat” the tariffs. After a series of tit-for-tat escalations between the USA and China, resulting in the imposition of additional tariffs of 145% on US imports from China, there are signs of a softening in the USA’s position. In particular, it has been admitted by President Trump that the tariff percentage is “very high” and, moving forward, “it won’t be anywhere near that high. It’ll come down substantially, but it won’t be zero.”
INTRODUCTION An end to 80 years of trade liberalisation? Impact of the tariff hikes on the US economy Will there be a US recession? When America sneezes, the rest of the world catches a cold TRADE LIBERALISATION: COMPARATIVE ADVANTAGE VS COMPETITIVE ADVANTAGE? THE RISE AND FALL OF CHINA? CONCLUSION
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