US President Trump’s tariffs threaten the world

US President Trump’s tariff policy is threatening the global economy. On February 9, Trump revealed that he would impose a 25% tariff on steel and aluminum products imported from the United States, and would also introduce a “reciprocal tariff policy” in the near future to impose the same level of tariffs on high-tariff trading partners. The trade friction originating from the United States will bring downside risks to the global economy.

Trump said on February 9: “All steel products imported into the United States will be subject to a 25% tariff.” He made the above statement to reporters on the presidential plane. He also said that aluminum products are no exception. Although the target country was not explicitly mentioned, there is a high possibility that Japan will become the target.

According to data from the US Department of Commerce, the United States mainly imports steel from Canada, Brazil and the European Union. These three regions account for more than half of the total imports, followed by Mexico and South Korea. Imports from Japan also account for about 4%.

When Trump first took office, steel and aluminum products were included in the tariff protection. In March 2018, the United States imposed a 25% tariff on steel and a 10% tariff on aluminum products under Section 232 of the Trade Expansion Act on the grounds that they posed a threat to national security.

Subsequently, countries such as Mexico and Canada signed trade agreements with the United States and were excluded from the target countries of the additional tariffs. The former Biden administration agreed to partially exempt Japanese steel products from tariffs.

The United States International Trade Commission estimates that due to these tariffs, US steel imports have decreased by 24%, pushing up domestic circulation prices in the United States by 2.4%.

Tariffs are usually borne by the importer. If the cost of tariffs is passed on to domestic sales prices in the United States, it may lead to a resurgence of inflation that has stabilized.

When asked whether products from Canada and Mexico will be included this time, Trump replied: “All imported products” will be included. Details such as whether to increase the current tariff by 25% are not yet clear.

Trump also once again showed a positive attitude towards the introduction of the “reciprocal tariff” policy in which the United States also imposes tariffs on US products from trading partners. It is expected to be announced on February 11 or 12. He said it would take effect “almost immediately”.

During his campaign, Trump has been saying that he would impose a 60% tariff on China and a general tariff of 10% to 20% on other countries and regions.

After Trump came to power, he said he would impose tariffs on Colombia, neighboring Canada and Mexico in South America in the name of combating illegal immigration and the synthetic drug fentanyl. The measures against Colombia were postponed, and the tariffs on Mexico and Canada were postponed for a month.

Trump announced a 25% tariff on steel and aluminum, which is not only a measure against specific countries, but also shows an attitude of raising tariffs on different categories. As the “America First” policy accelerates, more and more voices worry that this will lead to global protectionism.

In January, the International Monetary Fund (IMF) believed that “uncertainty in trade policy is increasing rapidly” and lowered its outlook for the growth rate of world trade volume. The forecast for 2025 was reduced by 0.2 percentage points compared with the forecast in October 2024, and the forecast for 2026 was reduced by 0.1 percentage points.

The IMF believes that the tariff policy proposed by Trump will pose a downside risk to the global economy. If the United States raises tariffs and trade frictions intensify, it may lead to reduced investment and supply chain disruptions.