Tariffs
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The United States and China said Monday they would temporarily slash tariffs in an effort to reduce global trade tensions.
Note: Goods from Canada and Mexico that fall under the U.S.M.C.A. trade pact — the agreement that replaced NAFTA — are not subject to tariffs that took effect in March targeting those countries.
Since re-entering office, President Trump has announced a barrage of tariffs to try to rewire the global economy. The trade actions have taken effect in fits and starts and created wild swings in markets and fresh tension among some of America’s closest trading partners. They have drawn warnings from economists about an economic downturn that could punish consumers.
Last month, Mr. Trump rolled out his most punishing tariffs yet on dozens of U.S. trading partners before abruptly reversing them for 90 days for every country except China. And on Monday he temporarily paused the China tariffs.
China:
The United States and China on Monday said they had reached an agreement to reduce the tariffs they have imposed on each other for 90 days while they try to negotiate a trade deal.
The announcement came after a weekend of high-stakes negotiations between officials from the two countries in Switzerland.
The Tit-for-Tat Tariffs
Between the U.S. and China
April 9
145%
President Trump raised tariffs on Chinese
goods multiple times this year before
lowering the rates temporarily while
the two sides negotiate.
April 8
104%
March 26
25% on cars
and parts
Feb. 10
April 2
25% on steel
and aluminum
54%
May 12
30%
March 3
Feb. 1
20%
10% on all goods
April 11
125%
China retaliated against the tariffs with equivalent levies but has also agreed to a pause during ongoing talks.
April 9
84%
April 4
Feb. 4
March 4
10% on U.S. food and agricultural products
10% on natural gas, coal and farm machinery
34%
May 12
10%
The Tit-for-Tat Tariffs
Between the U.S. and China
President Trump raised
tariffs on Chinese goods
multiple times this year
before lowering the rates
temporarily while the
two sides negotiate.
April 9
145%
April 8
104%
March 26
25% on cars
and parts
Feb. 10
April 2
25% on steel
and aluminum
54%
May 12
30%
March 3
20%
Feb. 1
10% on all goods
China retaliated against
the tariffs with equivalent
levies but has also agreed
to a pause during
ongoing talks.
April 11
125%
April 9
84%
March 4
10% on U.S. food and agricultural products
Feb. 4
April 4
10% on natural
gas, coal and farm machinery
34%
May 12
10%
Sources: White House, China’s Ministry of Finance
By Agnes Chang and Pablo Robles
Many Chinese imports entering the United States had been subject to at least a 145 percent tariff — essentially a tax equal to one-and-a-half times the cost of the product itself. That will now be 30 percent. For its part, China agreed on Monday to lower the tariffs it had put on imports from the United States to 10 percent, from 125 percent. The agreement apparently left unchanged a move by Mr. Trump to eliminate a longstanding exception that allowed many relatively inexpensive goods from China to enter the country duty free.
Britain:
Last month, Mr. Trump imposed the same 10 percent tariff on Britain that he put on other countries. Cars shipped to the United States from Britain face a 27.5 percent tariff, and British steel is subjected to an import duty of 25 percent.
On Thursday, Mr. Trump unveiled a preliminary agreement with Britain that would pare back these tariffs. Under the terms of the deal, Britain would be allowed to send 100,000 vehicles to the United States under a tariff of 10 percent, and U.S. tariffs on steel would fall to zero.
The 10 percent levy in place for all British exports would remain in place, though the British government said it was still pushing to bring it down.
Though Britain is not one of America’s biggest trading partners, Mr. Trump said the agreement would be the first of many. U.S. officials have also been negotiating with India, Israel, Japan, South Korea and Vietnam, among other trading partners.
Mr. Trump’s point of view appears to be that any trade deficit — the value of goods the United States imports from a country, minus what it sends as exports — is bad. He has long described bilateral trade deficits as examples of America being “ripped off” or “subsidizing” other countries.
Note: Data is adjusted for seasonality and shows 2024 trade in goods.
Source: Census Bureau
By The New York Times
The president and his advisers say their goal is to make the tariffs so painful that they force companies to make their products in the United States. They argue that this will create more American jobs and push up wages.
But Mr. Trump has also described tariffs as an all-purpose tool that will force Canada, Mexico and China to crack down on the flow of drugs and migrants coming into the United States. The president also maintains that tariffs will rake in huge sums of revenue that the government can use to pay for domestic tax cuts.
Economists say that tariffs cannot simultaneously achieve all of the goals that Mr. Trump has set. In fact, many of his aims contradict one another. The same tariffs that are supposed to increase U.S. manufacturing are also making life painful for U.S. manufacturers, by disrupting their supply chains and raising the cost of their raw materials.
“All of these tariffs are internally inconsistent with each other,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics, a Washington think tank. “So what is the real priority? Because you can’t have all those things happen at once.”
A tariff is a government surcharge on products imported from other countries.
Tariffs are paid by the companies that import the goods. The revenue from U.S. tariffs is paid by U.S. importers to the U.S. Treasury Department.
For example, if Walmart imports a $100 shoe from Vietnam — which faces a 46 percent tariff — Walmart will owe $46.00 in tariffs to the U.S. government.
What happens next?
Walmart could try to force the cost onto the Vietnamese shoe manufacturer, by telling it Walmart will pay less for the product.
Walmart could cut into its own profit margins and absorb the cost of the tariff.
Walmart could raise the price of the shoes at its stores.
Or, some combination of the above.
Economists found that, when Mr. Trump put tariffs on China in his first term, most of that cost was passed on to consumers. But economic studies found that his tariffs on foreign steel were a bit different; only about half of those costs were passed on to customers.
It’s hard to imagine an American home without Chinese products. Many essentials are imported almost entirely from China — and with new tariffs, they’re likely to become more expensive.
The New York Times analyzed import data to show where Americans may see product shortages, fewer choices and price increases.
We analyzed import data to show where Americans may see product shortages, fewer choices and price increases.
What happens if shelves are emptier? Sacrifice for your country, the president says.
“You know, somebody said, ‘Oh, the shelves are going to be open,’” Mr. Trump recently said. “Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally.”
Mr. Trump’s tariffs target countries that supply a wide variety of goods to the United States. In some cases, prices have already started to go up. But for American families, the full effect of the new policies is still to come, but they are likely to result in higher prices at grocery stores, car dealerships, electronics retailers and clothing outlets.
Wirecutter has advice about how consumers can cope.
One way to understand how companies are reacting to the tariffs is to think about Christmas.
The production of toys, Christmas trees and decorations is usually in full swing by now. It takes four to five months to manufacture, package and ship products to the United States. And factories in China produce nearly 80 percent of all toys and 90 percent of Christmas goods sold in America.
Toy makers, children’s shops and specialty retailers have recently begun pausing orders for the winter holidays as the import taxes cascade through supply chains.
“If we don’t start production soon, there’s a high probability of a toy shortage this holiday season,” said Greg Ahearn, chief executive of the Toy Association, a U.S. industry group representing 850 toy manufacturers.
Mattel, the U.S. toy company and maker of Barbies, recently said it would raise prices on U.S. toys because of Mr. Trump’s tariffs on imports from China.
China has borne the brunt of many of the new tariffs. The country, in turn, imposed tariffs totaling 84 percent on all U.S. products, raising levies by 50 percent to match an increase by Mr. Trump. It also barred more than a dozen American companies from doing business in China or with Chinese companies, and halted chicken imports from five of America’s biggest exporters.
In just one week, China and the United States took steps that until very recently would have been almost unimaginable. For nearly half a century after the death of Mao Zedong, the two countries seemed on a course toward ever greater economic integration. Some experts even referred to the partnership of China and America as “Chimerica.”
1789: At its founding, the United States relied heavily on tariffs to finance the federal government and protect domestic manufacturers, as proposed by Alexander Hamilton, the first Treasury secretary.
1828: The federal government passed tariffs averaging 38 percent to shield the country’s manufacturing sector from foreign competitors. These were labeled the “Tariff of Abominations” by Southern states, whose economies relied on exporting raw materials and importing manufactured goods, leading to a constitutional standoff.
1930: The Smoot-Hawley Tariff Act of 1930 was enacted after the stock market crash of 1929, an attempt to protect U.S. businesses. Instead, as described in “Ferris Bueller’s Day Off,” the tariffs “did not work, and the United States sank deeper into the Great Depression.”
1934: Franklin D. Roosevelt signed the Reciprocal Trade Agreements Act, which gave the president the authority to negotiate bilateral trade agreements. This set the stage for more than 90 years of liberal free trade policies.
This article is by Ana Swanson, Lazaro Gamio, Daisuke Wakabayashi, Jack Ewing Tyler Pager, Ben Protess, Andrea Fuller, Joe Rennison, Jeanna Smialek, Mark Landler, Eshe Nelson, Alexandra Stevenson, Andrew Duehren, June Kim, Jack Ewing, Karl Russell, Colby Smith, Ian Austen, Vjosa Isai, Annie Correal, Keith Bradsher, Alan Rappeport and Christine Zhang.
Malaysia’s New Reality: A crucial cog in the global semiconductor industry, Malaysia aims to build high-end chips. It will have to contend with President Trump’s trade policy.
Chinese Battery Giant’s Debut: Tensions between China and the United States pushed Contemporary Amperex Technology Ltd., the world’s biggest maker of batteries for electric cars, to shut U.S. onshore investors out of its share sale.
Trump Berates Companies: President Trump is telling some of the nation’s largest companies that they should eat the cost of his tariffs. Economists and populists on the left and right disagree on the necessity of passing along the cost increases.
Fear in Canada: President Trump’s tariffs on auto parts are already causing job losses in Windsor, Ontario, the heart of an industry that makes components for vehicles bound for the United States.
Ammo Makers in Balkan Valley: Companies that make ammunition in the Bosnian city of Gorazde fear they may not survive the tariffs imposed on the goods that they send to their biggest market — the United States.
Movie Tariffs: Hollywood offers a service, and services are what really drive the U.S. economy. President Trump’s proposed tax could set off a second, and more damaging, trade war.
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