In 2025, President Donald Trump's administration implemented a series of aggressive tariffs targeting major trading partners, including China, Canada, and Mexico. These measures have led to significant economic repercussions both domestically and internationally. 

On March 4, 2025, the U.S. imposed 25% tariffs on all imports from Mexico and Canada, excluding Canadian oil and energy, which faced a 10% tariff. China saw its tariffs increase from 10% to 20%. These actions aimed to pressure these countries to address issues like illegal immigration and fentanyl smuggling. In retaliation, Canada imposed 25% tariffs on $155 billion worth of U.S. goods, while China and Mexico announced their own countermeasures .

The Organization for Economic Co-operation and Development (OECD) reported that these tariffs are slowing economic growth and reigniting inflation. U.S. economic growth is projected to slow to 2.2% in 2025, down from 2.8% the previous year, while inflation is expected to rise to 2.8% .

The tariffs have disrupted supply chains, particularly in the automotive, energy, and food sectors. Gas prices in the Midwest could surge by up to 50 cents per gallon, and the cost of cars may increase by up to $3,000 due to higher production costs .

Major companies are adjusting to the new trade environment. Apple and Amazon are shifting production away from China to countries like India and Vietnam. Automakers such as GM and Ford have revised their earnings forecasts, citing billions in potential tariff-related costs. Caterpillar anticipates $250–$350 million in quarterly cost increases due to tariffs .

China's exports to the U.S. dropped by over 20% in April 2025, following the implementation of 145% tariffs. In response, China imposed a 125% levy on U.S. imports. Despite the U.S. slump, China's overall exports grew 8% year-on-year as exporters shifted focus to Southeast Asian markets .

The Trump administration is considering reducing tariffs on Chinese imports from 145% to between 50%