Donald Trump Sparks Fresh Global Trade War with Wide-Ranging Tariffs
Major Economies Like Taiwan, Canada, and India Face Steep Import Duties
Summary
Former US President Donald Trump has triggered a new chapter in global trade tensions by imposing sweeping tariffs on dozens of countries. The move, aimed at reducing America’s trade deficit and boosting domestic revenue, marks a major shift in US trade policy and could have long-term effects on international relations and the global economy.
A New Wave of Tariffs Hits Global Markets
On Thursday, Donald Trump issued a bold executive order that significantly raises tariffs on a wide range of goods from key US trading partners. This comes after months of back-and-forth discussions and warnings, and just ahead of the August 1 deadline he set for countries to negotiate trade deals with the United States.
Countries hit by the new measures include:
Taiwan – 20% tariff (down from an earlier proposed 32%)
Canada – 35% tariff
India – 25% tariff
Switzerland – 39% tariff
Thailand – 19% tariff
Vietnam – 20% tariff
Meanwhile, nations such as the UK, EU, and Japan managed to strike deals with Washington, securing slightly reduced tariff rates, mostly in the 10–15% range.
The Reason Behind the Move
The official statement from the Trump administration claims that the tariffs are intended to:
Reduce the US trade deficit
Protect national security
Strengthen the domestic economy
Fund domestic tax cuts via increased revenue from imports
A senior US official said:
“We’re transitioning from a system built on maximum efficiency to one that prioritises fair and balanced trade.”
Winners and Losers: A Breakdown of Tariff Changes
Here’s a simplified view of how the tariffs have shifted for key countries:
| Country | April 2 Tariff (%) | New Rate (%) |
|---|---|---|
| EU | 20 | 15 |
| Japan | 24 | 15 |
| South Korea | 25 | 15 |
| Taiwan | 32 | 20 |
| Vietnam | 46 | 20 |
| UK | 10 | 10 |
| India | 26 | 25 |
| Brazil | 10 | 10* |
| Switzerland | 31 | 39 |
| Thailand | 36 | 19 |
*Brazil also faces an additional 40% levy on select goods.
Canada Voices Disappointment
Canada’s Prime Minister Mark Carney, who recently won re-election on a platform of resisting Trump’s economic pressure, expressed his dissatisfaction.
“We’re disappointed,” said Carney. “Some sectors will be heavily impacted, but discussions with the US will continue.”
The US Commerce Secretary Howard Lutnick fired back, calling Carney “tone deaf” for announcing that Canada would recognise Palestinian statehood, which reportedly irritated Trump.
Taiwan Seeks Negotiation
Taiwan’s President Lai Ching-te responded to the 20% tariff by calling it “temporary” and expressed hope that talks could lead to a reduction.
As the world’s leading semiconductor exporter, Taiwan’s inclusion in the tariff list could have ripple effects across the global tech industry.
What’s Next for China?
Interestingly, China — the world’s largest exporter — was excluded from Thursday’s order. However, it faces a separate August 12 deadline to reach a new agreement with Washington. If no deal is struck, similar tariffs could be on the horizon for Chinese goods.
Market Reaction: Calm but Watchful
Despite the sweeping nature of the tariffs, global markets reacted mildly:
US Dollar strengthened slightly
S&P 500 and Nasdaq futures dipped by 0.1–0.2%
Euro Stoxx 50 futures dropped 0.5%
US Treasury bonds remained flat
The calm response is a stark contrast to the market panic seen after Trump’s “liberation day” tariffs in April. Analysts believe investors had largely anticipated these moves.
How Tariff Levels Are Now Determined
Under the new system, tariffs are set based on how much a country imports from or exports to the US:
Countries with a US trade surplus face higher duties
Countries with balanced or favourable trade terms face lower tariffs
Nations without any trade deals face the steepest levies
This marks a significant departure from the long-held global trade philosophy that prioritised efficiency and low barriers.
Final Thoughts: A Shift in the Global Trade Landscape
Trump’s decision to move forward with aggressive tariffs marks a turning point in how the United States deals with its trading partners. While some nations have managed to strike quick deals, others now face the daunting challenge of renegotiating terms in a more protectionist world order.
With the August 1 and August 12 deadlines looming, all eyes are now on how the remaining nations — especially China — respond to this renewed push for a trade realignment.
Sources and References:
Reuters – Kent Nishimura Photography
Financial Times Reporting by Aime Williams (Washington) and Kathrin Hille (Taipei)
White House Executive Order (Released July 31, 2025)
Fox News Interview with US Commerce Secretary Howard Lutnick
Public Statements from Canada’s PM Mark Carney and Taiwan’s President Lai Ching-te
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