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As Donald Trump's tariffs "go into force immediately," there are three major unknowns.

Richa Pandey
02 Apr, 2025

If Donald Trump wins the 2024 U.S. presidential election, one of his first economic policies could be the immediate imposition of new tariffs on imports. During his previous term, Trump aggressively used tariffs as a tool to protect American industries, particularly targeting China, but also applying levies on allies like the European Union and Canada. Now, as he campaigns on a promise to escalate trade restrictions, economists and businesses are bracing for potential disruptions—but major uncertainties remain about the impact of such measures.

1. How Severe Will the Tariffs Be—and Who Will Be Targeted?

Trump has hinted at imposing across-the-board tariffs, possibly as high as 10% on all imports, with even steeper penalties for specific countries like China. Some reports suggest he is considering a staggering 60% or higher tariff on Chinese goods. However, the exact scope remains unclear.

- Will the U.S. reintroduce broad Section 301 tariffs on China, or will they be more selective?

- Will allies like Mexico, Canada, and the EU face renewed trade battles, or will Trump focus solely on geopolitical rivals?

- Could certain industries (e.g., electric vehicles, steel, or semiconductors) face targeted tariffs?

The answers to these questions will determine whether the policy triggers a full-blown global trade war or remains a more contained economic strategy.

2. How Will Trading Partners Retaliate?

One of the biggest risks of Trump’s tariff-heavy approach is retaliation. During his first term, China responded with its own tariffs on U.S. agricultural goods, hurting American farmers. The EU also threatened countermeasures on iconic U.S. products like bourbon and motorcycles.

If Trump imposes even harsher tariffs this time, the reactions could be more severe:

- **China** might restrict critical exports like rare earth minerals, which are vital for U.S. tech and defense industries.

- **Europe** could accelerate its move away from U.S. trade partnerships, deepening ties with China instead.

- **Mexico and Canada**, key partners in the USMCA (NAFTA’s successor), might challenge the tariffs legally or impose their own restrictions.

The global supply chain, still recovering from pandemic-era disruptions, could face new shocks—raising costs for businesses and consumers.

3. Will Tariffs Actually Help U.S. Workers—Or Backfire?**

Trump argues that tariffs protect American jobs by making foreign goods more expensive and encouraging domestic production. However, economists remain divided on whether this approach works in the long run.

- **Possible Benefits:** Some industries, like steel and manufacturing, could see a short-term boost in demand for U.S.-made goods.

- Potential Downsides:

- Higher import costs could fuel inflation, worsening the cost-of-living crisis.

- Export-reliant sectors (agriculture, automotive) may suffer if other countries retaliate.

- Companies relying on global supply chains (e.g., tech and retail) could face higher operational costs, leading to price hikes.

History suggests mixed results: While some steel jobs returned under Trump’s tariffs, many were lost in other sectors due to trade tensions.

Conclusion: A High-Stakes Gamble

Trump’s promise to impose tariffs “immediately” sets the stage for significant economic turbulence. The three big unknowns—the scale of tariffs, the intensity of retaliation, and the real-world impact on jobs and prices—will shape whether this policy revives U.S. industry or triggers a damaging trade conflict.

For businesses, investors, and consumers, the uncertainty alone could disrupt markets long before the tariffs take effect. One thing is clear: If Trump returns to the White House, the global trade landscape is in for another seismic shift.