New Tariffs imposed by U.S. and what they mean for the future

By Michael Castillo

On Feb. 1, 2025 the United States imposed a set of new tariffs on Canada, China, Mexico and the European Union. These tariffs aim to address trade imbalances and protect domestic industries. The imposed tariffs are as follows:

• Canada and Mexico: A 25% tariff was imposed on all imports, with the exception of Canadian energy products (including electricity, natural gas, and oil), which are subject to a 10% tariff. ​

• China: An additional 10% tariff was initially imposed on all imports, which was later increased to 20% on March 4, 2025. ​

• European Union: While initial tariffs targeted Canada, Mexico, and China, President Trump has threatened to impose a 25% tariff on EU goods, with further actions anticipated.

Since their launch, there has been a buzz surrounding these tariffs and their potential impacts on the U.S. and its economy, but what do these tariffs really mean for the future?

1. International Relations:

Since these tariffs were imposed the relationships between the U.S. and its trading partners has been harmed. Canada and Mexico responded with retaliatory tariffs on U.S. goods targeting products like fruits, vegetables, appliances, and steel and aluminum. China also implemented countermeasures against the U.S. they imposed additional tariffs on American goods and restrictions on exports to American companies. The European Union also intends to respond to any U.S. tariffs if imposed.

2. Economic impacts on United States:

These tariffs are expected to lead to higher prices for consumers domestically. Industries reliant on imported materials, such as the automobile industry, may face increased production costs, potentially leading to job losses. Economic analyses estimate that these tariffs could reduce the U.S. GDP by 0.4%, which would result in the loss of 309,000 full-time jobs. Also, the uncertainty surrounding trade policies might discourage investments from nondomestic companies

3. Economic impacts on a global scale

The U.S. tariffs have intensified global trade tensions, which have prompted retaliatory measures from the countries that have been affected. This escalation disrupts supply chains, increases production costs, and weakens economic stability, particularly in nations that rely heavily on exports to the U.S. Smaller economies, mostly those in Latin America and Southeast Asia, may face a decline in trade revenue. While major economies such as China and the European Union are likely to strengthen trade alliances with each other, reducing their reliance on the U.S. market. Over time these shifts could reshape the market entirely, diminishing U.S. economic influence while accelerating trade agreements that exclude American businesses.