USA Trade War

Update.2

The European Commission strongly condemned the U.S. reciprocal tariffs, describing them as "unjustified" and potentially damaging to the intricate web of integrated value chains across Europe. Officials warned that these tariffs could lead to higher production costs and fuel inflation, ultimately harming workers, businesses, and consumers throughout the EU. The European Parliament echoed this concern, emphasizing the need for a unified and strong response to protect the European economy and maintain fair trade practices. 

Instead of launching immediate retaliatory tariffs on U.S. goods worth approximately €21 billion, the European Union opted to pause these countermeasures for 90 days. This suspension was intended to provide a window for constructive dialogue and negotiations with the United States. The European Commission made it clear that while they preferred a diplomatic resolution, "all options remain on the table" should the talks fail to yield a satisfactory outcome. This cautious approach was widely supported within the European Parliament, which stressed the importance of balancing firm defense of EU interests with diplomatic engagement. 

Although no final agreement has yet been reached, the EU’s approach has centered on de-escalation and pursuing a “zero-for-zero” tariff framework—eliminating all tariffs on industrial goods between the U.S. and the EU. Nevertheless, some skepticism persists among member states, with concerns about the potential economic fallout and whether such an ambitious deal is realistically achievable. The European Parliament continues to monitor negotiations closely, advocating for a solution that protects European economic interests while avoiding a full-scale trade war.

for more information:  Europal

Update.1

In a move to reshape global trade dynamics, the United States introduced a series of tariffs as part of a "reciprocal" trade policy. These tariffs, announced under the Trump administration, were designed to address long-standing trade imbalances with both allies and adversaries. They specifically targeted key sectors such as steel, aluminum, automotive goods, and semiconductors. According to the U.S. Trade Representative (USTR), the goal was to "level the playing field" by imposing tariffs on products from countries that had been perceived as taking unfair advantage of U.S. markets. This protectionist policy quickly attracted global attention, with many countries questioning its potential impact on international trade and economic stability. 

The United States’ move was met with concern from a wide array of global trading partners. European Union leaders, alongside countries such as Canada and China, expressed strong opposition to the new tariffs. Many saw these actions as an infringement on long-standing trade agreements and norms established by the World Trade Organization (WTO). Critics argued that while the U.S. aimed to safeguard domestic industries, the broad application of tariffs could lead to retaliatory measures that would disrupt international supply chains and harm both U.S. and global economic growth. 

Within the U.S., the Trump administration justified the tariffs as essential to restoring fairness in global trade. Domestic agencies, such as the U.S. Department of Commerce, emphasized that these tariffs were intended to protect American jobs, especially in industries like steel manufacturing, which had seen significant decline due to cheap imports. The U.S. Trade Representative echoed this sentiment, asserting that these actions were necessary to counter "unfair trade practices" and to protect the integrity of U.S. industries. The rhetoric surrounding these tariffs portrayed them as a crucial step towards restoring American economic dominance in key sectors.

for more info: ustr.gov

Update.3

China responded decisively to the U.S. tariffs by implementing retaliatory measures, including a 34% tariff on certain U.S. imports effective April 10. In addition to these tariffs, China suspended planned trade actions related to TikTok and introduced non-tariff measures such as halting U.S. lumber imports and revoking soybean import licenses. These moves signaled Beijing’s strong opposition to the U.S. trade restrictions and an intent to safeguard its own economic interests. 

Beyond tariffs, China also imposed export controls on rare-earth minerals, which are essential for industries including electronics and defense. This action was seen as a strategic lever to increase pressure on the U.S., given the critical role these minerals play in high-tech manufacturing. Chinese officials publicly warned that further escalation in trade disputes would be economically counterproductive and urged both sides to avoid actions that could damage global economic stability. 

Throughout the trade dispute, China maintained that its measures were defensive responses to protect national interests and called on the U.S. not to treat the conflict as a game of tit-for-tat. The Chinese government emphasized the importance of preserving global trade links and expressed a preference for dialogue and negotiation over prolonged conflict. This approach reflects a careful balance between asserting its position and seeking to minimize harm to the global economy. 

for more info: gov.cn

Update.4

Canada responded swiftly to the U.S. tariffs by announcing a counter-tariff package valued at CAD $155 billion, labeling the U.S. measures as “unjustified.” The initial phase imposed 25% tariffs on $30 billion worth of U.S. imports, targeting everyday consumer goods such as orange juice and footwear. This immediate response aimed to protect Canadian industries and consumers from the economic impact of the U.S. actions. 

As the U.S. tariffs persisted, Canada expanded its countermeasures to include key sectors like steel, aluminum, and other products, matching tariffs on nearly $29.8 billion in U.S. goods. The Canadian government also introduced economic support programs and established a remission process designed to help affected businesses manage the financial strain caused by these trade tensions. These measures underscored Canada’s commitment to cushioning the domestic economy while maintaining firm resistance to the tariffs.

In parallel with these economic steps, Canada committed to addressing the dispute through legal and diplomatic avenues, including challenging the U.S. tariffs within the World Trade Organization (WTO) and under the United States–Mexico–Canada Agreement (USMCA). The government emphasized its focus on defending Canadian workers and industries, while aiming to avoid escalation into further non-tariff retaliatory actions for the time being. This balanced approach highlighted Canada’s preference for resolving trade disputes through established international mechanisms. 

for more info: canada.ca

Update.5

Mexico's response to the U.S. tariff threat was swift and firm, with officials, including President López Obrador, describing the U.S. action as a "flagrant violation" of the USMCA trade agreement. Despite the tension, Mexican authorities emphasized the importance of maintaining open communication channels but also warned that retaliatory measures, both tariff and non-tariff, would be considered if U.S. pressures continued. This position was clearly articulated in official statements issued by Mexico’s Ministry of Economy, asserting that the trade rules should be respected by all parties. 

In terms of negotiation, Mexico’s leadership attempted to de-escalate the situation by underscoring that many of the issues at stake, such as the control of fentanyl trafficking, were already being addressed through bilateral task forces. Mexican officials called for a more pragmatic and targeted approach to resolving disputes rather than resorting to tariffs that could harm both economies. This pragmatic stance reflected Mexico's preference for addressing the root causes of trade issues through joint efforts rather than punitive measures. 

Mexico also signaled its readiness to protect national interests, stating that while it would act if necessary, it preferred to resolve the situation through dialogue rather than escalation. The Mexican government consistently emphasized its commitment to constructive negotiations and maintaining a stable and productive trade relationship with the United States. This approach was aligned with Mexico’s long-standing diplomatic strategy of prioritizing dialogue and negotiation over conflict. (gob.mx). For more info: UK Government website.

for more info: gob.mx

Update.6

Brazil formally protested the U.S. decision to impose 50% tariffs on its exports, expressing strong indignation and warning that such measures could have serious economic consequences for both countries. In official communications, Brazil emphasized the long-standing history of over two centuries of cooperative trade relations with the United States and called for respect of fair trade principles. The Brazilian government stressed that unilateral tariff actions undermine the rules-based international trading system and could damage global economic stability.

Despite the tensions, Brazil showed a willingness to engage in dialogue, submitting a confidential negotiation proposal to the U.S. government on May 16 and requesting a formal response. However, Brazil has yet to receive an official reply, underscoring ongoing challenges in finding common ground. Brazilian officials have repeatedly called for renewed talks, highlighting the importance of diplomacy to resolve disputes and avoid further escalation that could negatively impact both economies.

In response to the tariffs, Brazil initiated a dispute at the World Trade Organization, arguing that the U.S. tariffs violate established WTO rules. Simultaneously, the Brazilian government announced a domestic support package worth $5.5 billion aimed at assisting exporters and mitigating the impact of the tariffs. Throughout, Brazil has continued to emphasize negotiation and diplomacy over immediate retaliatory actions, advocating for solutions that strengthen multilateral trade frameworks and promote sustainable economic growth.

For more info: gov.br

Update.7

The UK government responded to the imposition of U.S. tariffs with a tone of disappointment but emphasized a pragmatic approach. The Secretary of State for Business and Trade addressed Parliament, confirming awareness of the U.S. measures and reaffirming the UK’s commitment to de-escalation through diplomacy. While the UK did not immediately announce retaliatory tariffs, it made clear that all options remained on the table. Simultaneously, the government pursued ongoing negotiations with U.S. counterparts, aiming to safeguard UK economic interests and avoid disruption to critical transatlantic supply chains.

To ensure its policy was grounded in commercial realities, the UK launched a public consultation with businesses to assess the potential impact of the tariffs and shape appropriate responses. This included formal hearings and written submissions from industry leaders in sectors such as automotive, metals, and advanced manufacturing. A government-led review concluded in May, which helped refine the UK’s negotiating position and guided its response strategy in continued dialogue with U.S. trade officials. This consultative process was a key part of the UK’s commitment to transparency and evidence-based policy.

By late May, the UK successfully concluded a landmark economic agreement with the United States that rolled back significant tariffs on key goods, including automobiles, steel, and aluminum. The deal was heralded by both governments as a major breakthrough, preserving jobs and supporting industrial competitiveness. In addition to resolving immediate trade tensions, the agreement included provisions for deeper cooperation in emerging technologies and advanced manufacturing, laying a foundation for long-term bilateral economic engagement.

For more info: GOV.UK