Published: 1st August 2025 | The English Chronicle Online
In a sweeping overhaul of U.S. trade policy that sent shockwaves through global markets and diplomatic circles, former President Donald Trump has formally imposed a 35% tariff on Canadian imports, while simultaneously launching a new wave of tariffs affecting more than 90 countries. The announcement marks the most extensive use of tariffs by any U.S. administration in modern history, reinforcing Trump’s long-standing protectionist doctrine and reigniting fears of a new era of global trade fragmentation.
The decision follows months of tense negotiations since Trump’s initial proclamation on 2nd April, when he unveiled a 10% baseline tariff on nearly all imported goods. At that time, the White House labelled approximately 60 countries—including the European Union, China, India, Laos, and Myanmar—as the “worst offenders” in trade practices, warning they would face significantly higher rates unless individual trade agreements were successfully negotiated. The U.S. granted a 90-day reprieve to allow for such talks, which expired on 1st August.
Canada, a close economic and geopolitical partner of the United States, has emerged as one of the biggest casualties of this tariff escalation. The 35% duty now applies to Canadian goods that fall outside the framework of the US-Mexico-Canada Agreement (USMCA), a move that has deeply rattled Canadian leadership. Prime Minister Mark Carney issued a forceful response, declaring that Canada was “disappointed” by the decision and vowing to focus inward on national economic resilience. “Canadians will be our own best customer,” Carney said in a public statement. “We can give ourselves more than any foreign government can ever take away by building with Canadian workers and using Canadian resources.
While Mexico narrowly avoided a similar hike—thanks to a temporary 90-day extension—other trade partners found themselves facing harsh consequences. Tariffs on European imports were locked in at 15%, including key industries such as automobiles. The U.S.–EU agreement, still awaiting ratification by all 27 EU member states, includes provisions for zero tariffs on a limited set of U.S. products in return.
Asian countries, particularly those suspected of facilitating trans-shipment of Chinese goods, were hit with the stiffest penalties. Both Laos and Myanmar now face tariffs of 40%—among the highest levied—due to their sizeable trade surpluses with the U.S. and alleged trade route misuse. According to U.S. trade data, Laos exported over $800 million in goods to the United States in 2024 while importing less than $41 million in return, raising red flags in Washington. Myanmar, too, saw a trade surplus of $579 million in 2023, prompting similar scrutiny.
Trade policy analysts, such as Dr. Deborah Elms of the Hinrich Foundation, believe this latest tariff blitz is designed not just to address trade deficits but to strategically decouple the United States from Chinese manufacturing influence. “Though unclear, there does seem to be suspicion by some in the White House towards the relationship between some countries in the region for being too cosy with China and subject to trans-shipment,” Elms noted. “This move is as much about geopolitics as it is about trade.”
In an unexpected twist, even remote, uninhabited territories were not spared from scrutiny. The Heard and McDonald Islands—Australian territories in the Antarctic—remained on the tariff list with a 10% duty, despite the fact that no humans have inhabited the area for nearly a decade. “Poor old penguins, I don’t know what they did to Trump,” quipped Australian Trade Minister Don Farrell earlier this year, in response to the April tariff announcement. Australian Prime Minister Anthony Albanese added that the inclusion of the islands “just shows that nowhere on Earth is safe from this.”
Major corporations are also beginning to feel the ripple effects. Apple, which has been gradually shifting its supply chain from China to India and Vietnam, saw its market capitalisation plummet by $700 billion when Trump first announced the “Liberation Day” tariffs in April. The situation worsened this week as the U.S. imposed a 25% tariff on goods imported from India—Apple’s key manufacturing hub for American-bound products. With the price of iPhones and other electronics likely to rise for U.S. consumers, industry leaders are growing increasingly alarmed about the long-term implications of the administration’s aggressive trade posture.
In South Korea’s case, the road ahead remains uncertain. While it managed to strike a relatively favourable trade deal and avoid major tariff hikes, the country’s reliance on U.S. military protection remains a key bargaining chip. There are currently 28,500 U.S. troops stationed in South Korea as part of a long-standing defence pact. Trump has previously demanded that Seoul increase its financial contribution to support this presence. Although defence cost-sharing was left out of the final trade deal, South Korea’s newly elected president Lee Jae-myung is expected to visit Washington in the coming weeks, where discussions on military expenses will likely take centre stage.
With this expansive new tariff regime, Trump appears to be reshaping not only America’s trade relationships but also the very architecture of global commerce. By sidelining multilateral trade bodies and relying instead on bilateral, transactional negotiations, the administration has adopted an unapologetically nationalist economic stance. While this may appeal to segments of the American electorate who see globalisation as a threat to domestic industry, it risks isolating the U.S. from long-standing allies and undermining the rules-based international order that has governed global trade since the end of World War II.
As new trade deals are negotiated and retaliation from affected countries looms, the global economy is bracing for further uncertainty. Whether Trump’s trade war 2.0 will deliver the benefits it promises or descend into prolonged disruption remains to be seen. What is clear, however, is that the world has entered a new and unpredictable chapter in international economic relations—one driven not by consensus, but by confrontation.
