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.
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.
Disclaimer: This article is for informational purposes only. Readers should verify details from official announcements, government reports, and trusted news sources. RA News Updates does not represent any government authority or endorse any policy mentioned. The content is intended to inform and explain economic developments, not to provide investment advice or political commentary.
Author: Team RA News
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