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US Tariffs and Trade Tensions

  • Writer: Siddharth Somisetty
    Siddharth Somisetty
  • Jul 15
  • 3 min read

Updated: Aug 28

(Tobias Rademacher/Unsplash)
(Tobias Rademacher/Unsplash)

It has been six months since Donald Trump returned to the White House for his second term as President of the United States. Wasting little time, he has moved quickly to advance his agenda: rolling back regulations across the private sector, tightening immigration policies, expanding border security, and curbing DEI initiatives. With a unified Republican Congress, he also passed the “Big, Beautiful Bill,” which includes major tax cuts and allocates nearly $170 billion to

complete the border wall and attempt the largest deportation effort in U.S. history. One of the most controversial topics of discussion, however, is his large emphasis on tariffs and trade enforcement.

What Are Tariffs?


Though widely talked about, a study reported that only 45% of Americans truly understand what a tariff is. Essentially, a tariff is a tax imposed on by one country on goods and services imported from another country, paid by the importer. In fact, prior to the 20th century, America relied heavily on tariffs to generate revenue while maintaining little to no income tax levels. Over the course of time, the government realized that it would benefit businesses more to reduce tariffs and instead tax individuals by income. By utilizing this strategy, it hoped for increased trade and investment which would lead to a booming economy.


Trump’s Tariffs


During his campaign, Donald Trump pledged to impose tariffs as a way to boost American manufacturing and protect domestic jobs. In his second term, Trump has delayed the use of many tariffs in pursuit of negotiating trade deals with other nations. Currently, the Trump administration has set a deadline of August 1 for the tariffs to be implemented on 14 different countries. These nations include Japan, S. Korea, Indonesia, Malaysia, Laos, Myanmar, South Africa, Bosnia, Thailand, Cambodia, Bangladesh, Serbia, Tunisia, and Kazakhstan. These tariffs—initially delayed under what was called a "90-day pause"—were part of an effort to secure 90 trade deals in 90 days. Unless extended, the pause will expire in just a few weeks. If that happens, the affected countries could face “reciprocal” tariff rates ranging from 25% to 40%, with some facing additional levies.


Trade Deals So Far


The US has reached trade deals with the United Kingdom, Vietnam, and China. The details of the deal with the United Kingdom report that auto tariffs will be lowered to 10% for the first 100,000 units. Vietnam has agreed to a 20% baseline tariff with 40% on transshipments. Deals which are still in negotiation talks are with Japan, South Korea, India, Canada, and Mexico.


Economic Consequences


In the midst of these “trade wars,” US manufacturing continues contracting as supply chains remain disrupted due to tariff uncertainty. Additionally, the US dollar has dropped 10.7% in the year’s first half, which marks the worst start to a year since 1973 when Richard Nixon stopped tying the US dollar to the price of gold. Although tariffs on China dropped from 145%, many retailers are concerned with their profit margins and several small businesses have considered closing down. According to the Houston Chronicle, owner of American Chinese Fireworks, Ben Trieu, has many locations in Texas and said he would consider “shutting down if tariffs remain the same or increase next year,” (Green 2025). To make things even more challenging for the President is the current pushback from his own party as many GOP congressmen have expressed concerns over the impact of tariffs on businesses.


What To Expect


Tariffs are poised to have a significant impact on businesses across the country. While they will most likely raise prices for consumers and affect profit margins, they could also encourage companies to increase domestic production and consider more American opportunities than outsourcing work abroad. Ultimately, the decision rests in the hands of the President, and regardless of his decision, the economic landscape of America will undoubtedly be affected.


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