The United States recently hiked tariffs on Chinese products. There is a 10% tariff on most products from all countries, and there are higher tariffs on Chinese products. At one stage, it was 145% on Chinese products.
In May 2025, China and the USA agreed to cut tariffs for 90 days and to try to negotiate a long-term solution. American tariffs on Chinese products were cut to 30%, and the Chinese reduced their tariffs on US goods to 10%.
American tariffs on China date back to Trump’s first term. The President invoked Section 301 because the People’s Republic of China (PRC) was engaging in unfair trade practices, stealing intellectual property (IP), and artificially lowering the value of the Renminbi (RMB) to make their exports more competitive. China had been stealing IP for decades.
This could have been halted by firm and concerted action in the 1990s. But Western governments did not want to lose a lucrative emerging market. In the 1990s, the Americans reasoned that if they imposed tariffs on China to penalise them for IP theft, the Canadians, Australians, Germans, etc., would not, and they would get those important Chinese markets.
Fareed Zakaria is no fan of Trump. The Indian-American CNN news anchor said that Trump’s 2018 tariffs on China should be given a chance. No one else had tried to stop China’s blatant IP theft and unfair trade tactics. When Joe Biden became President in 2021, he left these sanctions largely intact.
The present situation is that, even after the tariffs were cut, they are at 30%, which is notably higher than before this trade war.
The situation is highly complex. Section 232 is used by the US Administration to say that tariffs apply to derivative products. This has an impact on supply chains.
The tariffs mean that China is exporting less to the United States and therefore, is concentrating on marketing its products to other countries. The Chinese economy has been slowing for a decade. Officially, it is growing by 5% per annum, but China lies about everything, and the real figure is more like 3%. The PRC faces a number of serious and growing headwinds. The population is falling, which means more pensioners and fewer workers. Fifty-eight per cent of Chinese youngsters attend university. Parents have invested heavily, assuming that their daughters and sons will gain well-paid jobs as a result. But there are fewer and fewer of such handsomely remunerated jobs.
Tariffs are hurting the US economy. The United States can export less to the PRC than before. American consumers are paying more for Chinese products than before. There are American companies that need Chinese goods and components, so these companies are hit.
China is also being pushed closer to Russia. There is a symbiosis there. This is the exact opposite of what the United States wants. The Trump Administration’s asinine tariffs have thereby strengthened Russia when its goal is to enfeeble Russia so that the Russians are obliged to end the Ukraine War.
Tariffs on the EU
Before 2025, American imports from the European Union were under the Most Favoured Nation (MFN) tariffs. There were a few Section 232 tariffs on aluminium and steel. The United States had done this to steel and aluminium from many countries.
The EU said it would hit back with tariffs because of US tariffs on EU metal exports. The European Union carried out this threat.
In 2025, the EU and the United States reached an agreement. This reduced the tariffs to a maximum of 15% on all EU exports to America. Crucially, this includes motor vehicles and parts for them.
There are some exceptions. For generic pharmaceuticals, planes and plane parts, as well as some natural products, the MFN rules are still applicable.
The Section 232 tariffs are applicable to lumber and semiconductors.
The EU agreed to get rid of tariffs on US industrial goods. In return, the US is giving preferential treatment to its market for US food, and it has removed tariffs on seafood altogether.
In September 2025, the US had introduced its reduction on European automobiles and car parts. It is now 15%; it used to be 25%.
Trade between the EU and the USA is not as much as it was before Trump. But even the higher tariffs before September 2025 had less of an injurious impact than many had feared. Not everyone in the EU considers the current dispensation to be acceptable. They believe that Brussels capitulated to the United States.
The US has higher tariffs on certain EU goods, such as metals.
In his first presidential term, Trump tweeted, “Trade wars are good and easy to win.” No one has ever cited an example of this. Donald J. Trump is consistent in his loathing of free trade. In the early 1990s, the North American Free Trade Agreement (NAFTA) was agreed upon between Canada, the USA, and Mexico. Trump was one of the few prominent people to denounce it. NAFTA led to a prolonged economic boom for the United States. NAFTA did not bring complete free trade, but it reduced or removed tariffs in most areas.
Donald Trump is academically subnormal. He never reads and cannot read at an adult level. His tweets are full of misspellings. He cannot say a word in a foreign language despite marrying two women from non-anglophone countries. He is incurious, ignorant, and lacking in cognitive faculties. There are studies of the effects of free trade and tariffs in academic journals written by renowned economists.
President Trump is so cut off from useful information that he fundamentally misunderstands how tariffs work. China does not pay tariffs to the United States. It is Americans who pay tariffs for buying Chinese goods.