Trade-Offs of Tariffs

Simon Vuong • June 11, 2025

President Donald J. Trump’s return to presidency has prompted an expansion of tariff policies reminiscent of those imposed during his first term in 2018. Furthemore, the administration expects these initiatives to redress trade imbalances in addition to bolstering domestic production through taxing imported products from foreign countries (Reuters). The President’s display of “a little tough love,” as articulated in his announcement speech on Liberation Day, April 2, 2025, marks a shift in the United States’ trade policies – reflecting a renewed interest for self-reliance (AP News).

With its introduction on Feb. 1, a few weeks into his presidency, Trump signed three executive orders pertaining to the implementation of a 10 % import on Chinese goods, while a 25% tax on Mexico and Canada (PBS). Citing the importance of addressing trade deficits and augmenting job availability through fostering domestic industries, Trump remained affirmative behind his actions even in the face of market volatility and foreign retaliation (AP News).

With the move inciting immediate criticism, the president temporarily softened his stance. Following negotiations with Canada and Mexico – during which both countries committed to aiding the U.S in bolstering border security and mitigating drug trafficking – the administration had agreed upon a 30-day suspension of these tariffs (PBS). Nevertheless, trade tensions were reignited on March 4, the expiration date, with the Canadian Prime Minister, Justin Trudeau, deeming the tariffs as an act with “no justification” and in response, enacted a 25% retaliatory tariff on C$155 billion worth of U.S. products – ranging from beer, wine, clothing to household appliances (Reuters).

Just two weeks later, a 25% tariff on steel and aluminum, implemented on March 12, signaled further development on tariff policies; however, it was April 2, coined “Liberation Day,” which marked the largest development for Trump’s initiative (AP News). In an effort to safeguard domestic industries from foreign competition and increase government revenue, the administration has imposed a universal 10% tariff on all foreign imports, with the exception of Mexico and Canada. This move was justified under the International Emergency Powers Act (IEEPA), which asserts that tariffs were an explicit response to a national emergency: U.S. trade deficits. Furthermore, with the introduction of reciprocal tariffs some nations experience higher taxation than others, evidenced in China facing an additional 34% tariff rate (Politico).

Beyond political implications, however, the effects of tariffs could be felt economically – with the National Association of Securities Dealers Automated Quotations (NASDAQ) experiencing a 15% dip following the announcement (Business Insider). Furthermore, the cost of tariffs could be passed on to the consumer in the forms of higher prices of goods and exacerbate inflation rates (AP News). In response to the economic instability, President Trump had metaphorically parrelled market volatility with medicine, stating “sometimes you have to take medicine to fix something” (CBS News). Reflecting upon the implications of tariffs, junior Ean Zheng provides his observations on the price fluctuations of goods.

“When I went to the East Coast with my father, we [visited] many different restaurants [and] grocery stores,” Zheng said. “[In addition] to the [elevated] prices of gas, we noticed that the prices of food in general, like eggs, have gone up significantly.”

Following the economic turbulence due to the tariffs, on April 9, the administration announced a 90-day suspension – a decisive move to facilitate international dialogue and stabilize volatile markets. Nevertheless, taxation on Chinese imports remained an exception to these policies; thus, effectively initiated the grounds for a trade war between the two global powers (AP News). As such, President Trump had increased Chinese imports’ tariff to 125%, to which China had responded with an 84% tariff on American goods. On April 11, however, developments between the two countries had resulted in a 145% on Chinese products while American goods were taxed 125% (Reuters). With economic and political tension on the rise, junior Cadence Cheung offers insight into the potential effect of tariffs on international business.

“My dad, who [imports] many chinese-manufactured products, has noticed an overall increase in price for supply,” Cheung said. “Overall, I believe it makes [the flow] of business more difficult as the cost of exporting and importing are elevated significantly.”

Playing an integral role in Trump’s agenda to “make [America] wealthy, good and wealthy,” tariffs come with long term promises of revitalizing American industries and providing new economic opportunities (Rollcall). Nevertheless, the introduction of a universal tariff baseline coupled with reciprocal taxes has heightened political and economical tensions, evidenced in the U.S.-China relations. With uncertainty surrounding the future of these policies, U.S. History and AP Psychology teacher Charles Kim provides his stance on the nature of American tariffs.

“I think a [possible positive of tariffs is] to provide American jobs and make American goods more accessible,” Kim said. “But at the same time, the trade off is [that] it’s going to take a long time for a lot of these companies to [domestically] produce these products. [Additionally], a lot of things that we could afford [will become] more expensive.