Trump has promised to increase duties for imports from various US trade partners. What does the US president aim with his aggressive agenda?

Recently, US President Donald Trump has imposed mutual duties on the country’s imports, as he had promised.

In March, the US government imposed, among other things, additional 20% duties on imports from China, 25% on products from Canada and Mexico, duties that have yet been paused, as well as duties on steel and aluminum imports.

Are the US wrong in world trade?

Trump believes that the US is being wronged in world trade, often arguing that many countries impose higher duties on US products compared to those imposed by the US, a condition that creates an imbalance.

According to the Global Trade Alert, an organization that evaluates commercial policies around the world, India, for example, usually imposes a 5-20% higher duties higher than the US in 87% of imported products.

As part of the “America First”, which is also dominated by Trump’s economic policy, the US president is convinced that by increasing the duties he will push the China and the EU to reduce their own fees, with US mutual duties leading to a reduction in the country’s trade deficit.

“This applies to all countries. When they are treating us fairly, we will also treat them rightly, “Trump recently said.

However, economists estimate that the US is benefiting from major commercial imbalances because the dollar – the de facto global reserve currency – is used in most trade, which significantly favors the US economy. Because states use the dollars they have made through their commercial activity to invest in the US, such as government bonds, stocks and real estate. This in turn keeps lower interest rates in the US and therefore enables US businesses and consumers to borrow and spend more money.

How exactly will Trump’s plan work?

As Trump has stated, duties are in the long run to concern “all countries” that contribute to the above imbalance, even the US close allies. According to Bloomberg Economics, the greatest damage will be suffered by developing markets, including India, Argentina, various African states, and Southeast Asia.

Economists warn that Trump’s duties, already imposed so far, will lead to rising prices for consumers in the US, thereby causing inflation.

After peak during the pandemic, inflation in the US has fallen sharply. Since January 2025, however, the consumer price index has increased by 3% – this is the highest increase in the last six months. And the impacts that tariffs on products from China, Canada and Mexico will have when they are in full force are uncertain.

Although some producers and entrepreneurs will benefit from Trump’s strategy in the medium term and they will be faced with increasing costs in raw materials, as well as problems with the supply chain.

US businesses based on exports will also address issues because of the countermeasures received by the country’s commercial partners. Some governments, such as China and the EU, have already announced countermeasures – and other countries are expected to follow their example.

Historical changes in world trade?

All of this has caused a great deal of concern about the possibility of a world trade war and a wider sense of insecurity in many industries and countries.

As Trump, however, is implementing his plan, so do the negotiations to reduce duties that impose various states on US exports.

India, for example, has already reduced duties on various products pending Trump’s threats. Indian Foreign Minister Vikram Misri said after a recent Trump meeting with Indian Prime Minister Narendra Monty in Washington that within seven months the two sides may come to an agreement to resolve the issue.

Taiwan’s president, Lai Qing-T, also spoke of a “win-win scenario” in collaboration with Washington, which “will not only provide benefits for the US, but also room for growth for Taiwan industries”.

The European Commission, on the other hand, described reciprocal duties as “one step in the wrong direction”, already clarifying in February that “it will” react strictly and immediately to any unjustified obstacles to free and fair trade “.

Speaking to the Financial Times, Berd Lange, head of the European Parliament Committee on trade, said that, in order to avoid imposing higher duties on Union exports, EU officials intend to reduce duties on cars at the levels of US and US.

The EU, for example, imposes a 10% duty on imported vehicles, while the US is only 2.5%. However, US duties on semi -trucks and commercial vehicles are much higher than the EU.

Trump’s plan could ultimately lead other countries to negotiate the imposition of duties with each country separately – thus ending in a previous decades, in which trade was based on generally accepted rules.

Curated by: George Passas