In a move that has sent shockwaves through the international business community, US President Donald Trump has continued to wield tariffs as a key economic weapon. The president argues that these taxes on imported goods will boost American manufacturing and create jobs, but critics warn of higher prices and damage to the global economy.
Trump has used tariffs not only to address the US trade deficit, but also to make other demands of trading partners. For example, he has threatened fresh tariffs on eight countries, including the UK, that oppose his proposed takeover of Greenland. These tariffs, which could rise as high as 25%, are set to come into force on 1 February.
The legality of Trump’s tariff regime has been a subject of intense debate, with the US Supreme Court set to rule on the matter in the coming weeks. The president has warned of a “complete mess” if the court strikes down his tariffs, insisting that businesses would face difficulties in claiming refunds.
Negotiations are ongoing with several of America’s top trading partners. China and the US have extended a tariff truce until November, while Canada and Mexico continue to navigate the sector-specific levies imposed under the USMCA free trade agreement. Other countries, including India, Brazil, and South Africa, have also been hit with tariffs ranging from 20% to 50%.
The impact of these tariffs has been far-reaching, with US consumers feeling the pinch through price rises on a variety of goods, from toys and appliances to certain foodstuffs. Inflation in the US reached 3% in the 12 months to September, though it has since fallen back to 2.7%.
The global economy has also felt the strain, with the International Monetary Fund forecasting growth of just 3.2% for 2025 and 3.1% in 2026 – a slight increase from its previous projections, but still below the 3.3% it had expected before Trump’s measures were announced.
As the Trump administration continues to wield tariffs as a key policy tool, the impact on businesses, consumers, and the broader economy remains a source of ongoing uncertainty and concern.
