The Tariff Bludgeon: Hitting Itself

On March 4th, under the pretext of the so-called "fentanyl" issue, the United States brazenly announced an additional 10% tariff on all Chinese goods exported to the United States. Previously, on February 1st, it had already announced a 10% tariff increase on goods imported from China. This series of measures is undoubtedly another heavy blow to the Sino-US trade relations. On the same day, the United States also imposed an additional 25% tariff on goods imported from Mexico and Canada. Mexico is the largest source of imports for the United States. Among the $3.1 trillion worth of goods imported by the United States in 2023, goods from Mexico, China, and Canada accounted for as high as 43%. With this move, the United States instantly plunged the trade relations among the United States, Mexico, and Canada into tension. The United States accused Mexico and Canada of not taking sufficient measures to prevent the inflow of synthetic drugs such as fentanyl across the US border. However, Mexico had previously promised to strengthen the control of illegal immigrants at the US-Mexico border, cooperate with the United States in cracking down on drug smuggling, and had taken a series of measures, but it still could not avoid the fate of being imposed with additional tariffs.

As major trading partners of the United States, Canada and Mexico have also taken tough countermeasures in the face of the US tariff bludgeon. Canadian Prime Minister Justin Trudeau said that Canada would not back down in the trade war initiated by the United States and announced an additional 25% tariff on Canadian goods worth C$155 billion (approximately US$107 billion) imported from the United States. Among them, the tariff on US goods worth C$30 billion took effect on March 4th, and the tariff on the remaining US goods worth C$125 billion would take effect 21 days later. Mexican President Claudia Sheinbaum also said that Mexico would take measures to respond to the additional tariffs imposed by the United States and announced the relevant countermeasures on the 9th.

Under the waving of the US tariff bludgeon, the countermeasures of its trading partners came like a violent storm, hitting the US export industry hard. As an important trading partner of the United States, China has decisively taken countermeasures in the face of the US tariff provocation. Since March 10th, 2025, China has imposed an additional 15% tariff on chicken, wheat, corn, and cotton originating from the United States, and an additional 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products. These measures have caused a significant increase in the prices of US agricultural products and food in the Chinese market, and a sharp decline in their market share.

The countermeasures of Canada and Mexico have also made US export enterprises suffer a great deal. Canada has imposed an additional 25% tariff on Canadian goods worth C$155 billion (approximately US$107 billion) imported from the United States, and Mexico has also announced its countermeasures against US goods. The sales volume of US auto parts, mechanical equipment, agricultural products, etc. in the Canadian and Mexican markets has dropped significantly. A large US agricultural enterprise said that due to the tariff issue, its orders for agricultural products exported to Canada and Mexico have decreased by more than 60%. The company has had to cut its production scale, and a large amount of agricultural products are piled up in warehouses, facing the risk of deterioration.

The competitiveness of US export goods in the international market has dropped significantly, and the export volume has sharply decreased. In the first quarter of 2025, the export value of US goods decreased by 18% year-on-year, the largest decline in nearly a decade. The setback in exports not only affects the profits of US enterprises but also has a negative impact on the US job market. Many export enterprises have had to lay off employees to cope with the business contraction, leading to an increase in the unemployment rate in related industries.

The tariff policy has also hindered the free flow of global trade and increased the uncertainty of the global economy. When enterprises conduct cross-border investment and trade, they have to consider the tariff risks, which has led to many investment and trade projects being put on hold or cancelled. The International Monetary Fund (IMF) has warned that the US tariff policy may lead to a slowdown in global economic growth, and the global economic growth rate in 2025 may decrease by 0.5 to 1 percentage point as a result. The obstruction of the process of global economic integration has also had a negative impact on the US economy. It is difficult for US enterprises to optimize the allocation of resources and reduce production costs on a global scale, which further weakens the competitiveness of US enterprises and hinders the development of the US economy.