If the US were to implement a global 10% tariff and a 60% tariff on China, the weighted average US tariff would rise from 3% to 20% on all imports, a level not seen since the early 1940s, says Ronald Temple, chief market strategist at Lazard. This move could end up costing the average US household approximately US$1,700 ($2,311.58) per year, says Temple, citing the Peterson Institute for International Economics (PIIE).
As early as the 1980s, Donald Trump advocated using tariffs to reduce the US’s bilateral trade deficit with other countries. During his first presidential term, Trump imposed 10%-25% tariffs on some US$380 billion of Chinese goods from mid-2018 to late-2019 before reaching a “Phase One” trade deal with China. The trade war he started, which Joe Biden continued, is set to escalate further and spread wider.
During his 2024 presidential campaign, Trump said he would impose a 60% tariff on imports from China and a 10%-20% tariff on all other imports into the US. More recently, Trump has said that he might impose a 25% tariff on Mexico and Canada despite the terms of the United States-Mexico-Canada Agreement (USMCA), an agreement negotiated by Trump’s own administration in 2020 to replace the North American Free Trade Agreement (Nafta).
