The
45th US President Donald Trump is making headlines again in 2025 with his
stringent tariff plans. Trump has declared that the tariff on imports will
increase which can secure American industries and employment. But what does it
mean for the common people of the United States of America? What is the tariff
and how will it work? How is Trump's
crafted plan for tariff increase going to affect trade, policies and the global
economy? How is China at the centre of this specific plan?
This article breaks down all of the above in layman's terms.
What is the tariff and how did Donald Trump’s tariff plan work?
Tariffs refer to the taxes levied on goods that come from other countries. This is mainly a specific percentage of the value of products. If the 20% tariff is levied on a particular good which costs around $10 then the $1 tax will be applied in this context and the final cost of that good will be $11. The application of a 145% charge the Chinese goods will cost $24.50 including the tariff if its real cost is $10.
What Donald Trump proposes in 2025 regarding the tariff increase?
The tax reforms by Donald Trump
Trump has announced a 25% tax on Mexican and Chinese exports to the United States along with an additional 10% for China. With the retaliation, China has imposed 84% on US goods. Afterwards, the United States of America escalated the tariff for China and now it stands at 145% on Chinese imports. According to Donald Trump, this tariff plan will reduce the dependency of US citizens on Chinese goods, increase US manufacturing, protect US workers and support the America First Trade Policy.
Why China is Central to Donald Trump’s tax reform?
It is not new that China will be a key focus of the tariff plan proposed by Donald Trump. Back in the year 2018, at the time of Trump’s previous presidency term, a trade war started with China to embark on a steep tariff on the various products of China. In 2025, the US President is now all set to increase the stakes as he claimed that China is acquiring all the advantages of the United States trade policy. The tariff on Chinese goods will be a massive step that may cause China with its own tariff, specifically in the arena of US tech, agriculture, manufacturing and agriculture sports.
Also Read: Strengthening Global Ties: Narendra Modi’s Meetings with Donald Trump and Elon Musk
How Donald Trump's proposed tariff plan affects the people?
The tariff plan by Donald Trump could raise the prices of American families
If the 10% global tariff proposed by Donald Trump has been enacted, the prices of everyday items will increase. It will impact the prices of electronics and devices like phones and laptops. Besides, the new tariff plan will raise the prices of appliances, furniture, shoes, clothes, vehicles, car parts and imported foods. The study conducted by the Peterson Institute of International Economics has clearly disclosed that the tariff may cost around $1500 a year for American households as an added expenditure.
Trump’s tariff plan can affect small businesses
Many
US organisations depend on imported materials to manufacture their final
products. Due to this new tariff plan, the businesses may face a sliced profit
margin, huge production costs and the pressure of increasing the price or
laying off employees.
It will bring challenges for the export-dependent industries such as automotive and agriculture heavily.
The global reaction due to the global tariff plan by Donald Trump
The ongoing trade war between China and the US is emerging a dark shadow on global trade. There will be serious consequences on the global level due to the trade barriers and the new tariff plan. Asia and the European Union are highly concerned regarding the ripple effects on the trade agreements and the supply chain. The global markets are monitoring this tariff plan closely and estimating the instability in the global business. The world may witness unexpected trade wars and an exhausted economic relationship between China and the US if Donald Trump’s tariff plan is enforced into reality.
Conclusion
The
2025 tariff plan mapped by Donald Trump will touch everyone ranging from the
grocery store, and family spending to even the global stock market. Whether you
oppose or support this idea, it is the policy that impacts widely across the
globe.
