Trump’s tariff war: Who’s fighting back, who’s not? What about India?

United States President Donald Trump has made tariffs a cornerstone of his economic policy, arguing that they will reduce the US trade deficit, bolster domestic manufacturing and address what he sees as unfair trade practices by other nations.

Since taking office for his second term, Trump has imposed a range of new tariffs on key trading partners, including China, Canada, Mexico and the European Union, while also announcing reciprocal tariffs against countries that impose trade barriers on US goods.

In some cases, these tariffs are being used as economic leverage in broader geopolitical disputes, such as migration and drug trafficking concerns with Mexico and Canada.

While certain countries have retaliated with their own tariffs, others have either refrained from doing so or are negotiating exemptions. The impact on global trade and industries remains significant, as affected nations weigh their responses and businesses prepare for price fluctuations.

Trump’s tariffs on Canada and Mexico

On March 4, the Trump administration imposed a 25 per cent import tariff on goods from Canada and Mexico, with exceptions for energy products and potash, which received a reduced 10 per cent tariff.

The next day, the administration announced a temporary suspension — until April 2 — of tariffs on automobiles eligible for duty-free trade under the US-Mexico-Canada Agreement (USMCA).

This exemption was extended on March 6 to cover all USMCA-compliant goods. However, goods that do not meet USMCA standards remain subject to the new tariffs.

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Canada initially planned retaliatory measures totalling $87 billion but held back after some exemptions were announced.

However, it proceeded with a separate $21 billion tariff package on US products, including fruits and vegetables, appliances and alcoholic beverages. Additionally, Ontario imposed a 25 per cent surcharge on electricity exports to the US, and some provinces have ceased imports of US alcoholic drinks.

Mexico, on the other hand, considered retaliatory measures but ultimately did not enact them. Instead, Mexican President Claudia Sheinbaum called for calm and diplomacy, while also deploying 10,000 troops to the US-Mexico border to help combat smuggling.

China’s retaliatory measures amid escalation

China has been a primary target of Trump’s trade policies. On February 3, the US imposed an additional 10 per cent tariff on Chinese goods, adding to previous tariff rounds from both the Biden administration and Trump’s first term.

In response, China retaliated with a 15 per cent tariff on US coal and liquefied natural gas, as well as a 10 per cent tariff on crude oil, agricultural machinery, and other imports.

On March 3, Trump escalated the trade war by increasing tariffs on Chinese goods by another 10 per cent.

Beijing responded on March 10 with its own set of additional tariffs, including a 15 per cent hike on US chicken, wheat, corn, and cotton, as well as a 10 per cent increase on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products.

Furthermore, China targeted 15 American companies by restricting their access to its export market.

China’s foreign ministry has vowed to take “all necessary measures” to protect its interests, arguing that these tariffs violate World Trade Organization (WTO) rules.

Chinese Foreign ministry spokesperson Lin Jian stated, “If the United States… persists in waging a tariff war, a trade war, or any other kind of war, the Chinese side will fight them to the bitter end.”

European Union’s response to Trump

The European Union (EU) has not yet been subjected to a new round of tariffs, though Trump has threatened a 25 per cent levy on EU goods. On March 4, he announced reciprocal tariffs set to take effect on April 2 against any country that imposes tariffs on US products.

This would apply to the EU, China, India, Mexico, and Canada, though actual implementation is expected to take six months or more.

In response, the EU announced retaliatory tariffs worth €26 billion ($28 billion), set to take effect between April 1 and April 13. These tariffs will cover various US goods, including boats, bourbon, motorbikes, steel, and aluminium products.

European Commission President Ursula von der Leyen criticised the move, stating, “Tariffs are bad for business and worse for consumers.”

Steel, aluminium, copper and lumber tariffs

On March 12, the US implemented a 25 per cent tariff on steel and aluminium imports from all countries. Canada, Brazil, and Mexico — major suppliers of these metals — are among the most affected.

Despite earlier threats to double tariffs on Canadian metals, Trump reversed his decision hours before they were to take effect, following Canada’s suspension of electricity surcharges on US customers.

Additionally, on March 4, Trump announced a 25 per cent tariff on imported copper and lumber, increasing tensions with trade partners that export these raw materials.

India’s position aid Trump’s threats

India has been drawn into the tariff disputes as well. Trump has repeatedly criticised India’s trade policies, calling its tariffs “massive.” While Trump claimed that India had agreed to “cut their tariffs way down,” New Delhi has denied committing to any such reductions.

Prime Minister Narendra Modi has stated that the US and India will work toward a “mutually beneficial trade agreement” but has not confirmed any immediate tariff reductions.

The US remains a critical market for India’s IT and services sectors, while New Delhi has made substantial military hardware purchases from Washington in recent years.

Trump is expected to visit India later this year for a Quad summit, which could provide an opportunity for further trade negotiations.

Trump’s tariffs and their global impact

Trump’s tariff policies are likely to impact global trade dynamics for the foreseeable future. The increased cost of imported goods could drive up consumer prices in the US and beyond.

Historical data shows that previous tariff rounds led to price hikes — such as a 34 per cent increase in washing machine prices between 2018 and 2023 — before tariffs expired.

The stock market has already reacted to the uncertainty, with fluctuations in the automotive and manufacturing sectors. However, US Commerce Secretary Howard Lutnick has defended the policies, stating that the tariffs are “worth it” even if they lead to an economic downturn.

Countries like Canada, China, and the EU have already implemented or announced countermeasures, while others, including India and Mexico, appear to be adopting a wait-and-see approach.

Meanwhile, Vietnam, a nation that faces a large trade surplus with the US, expects to sign a trade pace with Washington to avoid any tariffs from the Trump administration, reported Reuters.

The southeast nation’s Trade Minister Nguyen Hong Dien is headed to meet Trump’s team this week.

With inputs from agencies