David Kelly of JPMorgan, $JPM: "The trouble with tariffs, to be succinct, is that they raise prices, slow economic growth, cut profits, increase unemployment, worsen inequality, diminish productivity and increase global tensions"

Trump’s Tariffs Reshape U.S. Trade Policy, Prompt Retaliation from Key Partners

President Donald Trump’s sweeping tariffs are reshaping decades of U.S. trade policy, affecting both allies and adversaries alike. The aggressive moves are sparking global retaliation and could have significant economic consequences in the months ahead.

Here’s where things currently stand with America’s key trading partners:

Canada & Mexico

• Trump’s 25% tariffs on all imports from Canada and Mexico took effect on March 4.
• Canada retaliated immediately, imposing tariffs on $107 billion worth of U.S. goods.
• Mexico’s president announced plans for retaliatory tariffs beginning Sunday.
• Trump discussed the situation with Canadian Prime Minister Justin Trudeau and the CEOs of General Motors, Ford, and Stellantis.

China

• Initial tariffs on Chinese goods went into effect in early February, prompting immediate retaliation from Beijing.
• On March 5, Trump doubled the tariffs on Chinese imports to 20%.
• China responded by imposing 15% duties on U.S. agricultural products, including chicken and pork, effective Monday.

European Union

• Trump has threatened tariffs on the EU, potentially expanding the trade war across the Atlantic.
• In February, Trump ordered a 25% tariff on steel and aluminum imports from all countries, impacting major U.S. trade partners and bolstering domestic industries in key electoral states.

Additional Tariff Measures

• Trump signed legislation allowing for reciprocal tariffs on U.S. trade partners, which could take effect as early as April.
• The administration is also preparing new tariffs on imported automobiles, which are expected to be implemented in April.

Economic Impact & Inflation Risks

These tariffs could fuel inflation by raising prices on consumer goods. Higher costs may influence Federal Reserve policy, potentially impacting interest rates in the coming months.

Trump Grants One-Month Tariff Exemption for U.S. Automakers

In a surprise move Wednesday, Trump announced a one-month exemption on auto tariffs for GM, Ford, and Stellantis.

“We are going to give a one-month exemption on any autos coming through USMCA,” a White House spokesperson said during a briefing.

• Reciprocal tariffs will still take effect on April 2, but automakers now have temporary relief to avoid an economic disadvantage.
• Stocks for all three companies surged Wednesday in anticipation of the announcement.

As the trade war escalates, the global economy braces for potential disruptions, with businesses and consumers alike feeling the impact.