Tariff War of the USA, China, Canada, and Others: A Comprehensive Overview

By Tracey Beatrice Ashworth
Enjoy international economics, trade and political affairs
Published: March 5, 2025, NZB News

Kia ora, Aotearoa. As of March 5, 2025, 10:18 AM NZDT, a fresh salvo in the global tariff war has been fired by the United States, with President Donald Trump imposing a 10% tariff on Chinese imports and 25% tariffs on goods from Canada and Mexico, effective March 4, 2025 (NPR, February 2, 2025, updated with posts on X, March 4). This escalation—following a temporary 30-day pause on Canada and Mexico tariffs announced February 4 (Reuters, February 5)—has reignited trade tensions, with China and Canada announcing retaliatory measures (X post

@JoumannaTV, March 4). For New Zealand, with our $190 billion export economy (Stats NZ 2024) and $2 billion trade with Bharat (India) (Stats NZ 2024), this tariff war ripples through our $1.5 billion trade sector (NZIER 2024) and the $5 billion contribution of our Indian diaspora (NZIER 2024). As an economics enthusiast, I’ll unpack the history, implications, data, stats, NZ impacts, and the latest updates—here’s the full picture.

Historical Context

Early Tariff Wars

Tariff wars aren’t new—global trade has long been a battleground. The U.S.’s Smoot-Hawley Tariff Act of 1930 jacked up duties to 40%, sparking retaliation and shrinking world trade by 66% from 1929–1934 (Investopedia, January 31, 2025), deepening the Great Depression—U.S. GDP fell 30% (BEA archives). Post-World War II, the General Agreement on Tariffs and Trade (GATT, 1947) cut average tariffs from 22% to 5% by 1994 (WTO), stabilising trade at $30 trillion today (WTO 2024).

The U.S.-Canada “Chicken War” of 1962 saw European Economic Community (EEC) tariffs on U.S. poultry jump to 13.43 cents/pound, slashing exports by 30%—President Lyndon Johnson hit back with a 25% “chicken tax” on trucks, still in place (Al Jazeera, February 4, 2025). NZ’s $1 billion cultural economy (NZIER 2024) notes these echoes—Bharat’s $1 trillion trade (FICCI 2024) grew through such lessons.

Trump’s First Trade War (2018–2020)

Trump’s first term kicked off a U.S.-China trade war in January 2018—25% tariffs on steel and 10% on aluminium (Section 232, Trade Expansion Act 1962) targeted China, Canada, and others (Wikipedia, March 4). By June 2018, $50 billion in Chinese goods faced tariffs—China retaliated with 25% on 128 U.S. products, including soybeans, dropping U.S. exports from 62% to 18% of China’s share (USDA, January 2022). Total U.S. tariffs hit $550 billion in Chinese goods; China’s reached $185 billion (Tax Foundation, March 5, 2025). Canada added $12.6 billion in duties on U.S. steel and goods (Investopedia, January 31).

• Stats: U.S.-China trade fell—exports dropped $27 billion (2018–2019, USDA); U.S. GDP shrank 0.2%, losing 245,000 jobs (Tax Foundation, June 2024). NZ exports to China grew 5% ($19 billion, Stats NZ 2019), filling gaps.
• Outcome: The Phase One deal (January 2020) eased some tariffs—China bought $13.8 billion in U.S. agri-goods (2020)—but was deemed a “failure” for persistent deficits (Wikipedia, March 4).

Biden Era (2021–2024)

Biden retained Trump’s tariffs, adding $18 billion in duties on Chinese EVs (100%), semiconductors (50%), and solar panels by May 2024 (White House, PBS News, February 3, 2025). China’s $48 billion trade with the U.S. held (FICCI 2024)—NZ’s $2 billion Bharat trade (Stats NZ 2024) stayed steady.

Recent Updates: March 2025 Tariff War

Tariff Announcement and Rollout

On February 1, 2025, Trump signed executive orders under the International Emergency Economic Powers Act (IEEPA), imposing 25% tariffs on Canada and Mexico (10% on Canadian energy) and 10% on China, effective February 4—paused for 30 days after talks with Trudeau and Sheinbaum (Reuters, February 5). On March 4, tariffs went live—Canada’s crude oil now faces 10%, all else 25%; Mexico’s 25% hits $400 billion in U.S. imports; China’s additional 10% adds to existing duties (NPR, February 2; X

@JoumannaTV, March 4).

• Stats: U.S. imports—Canada ($437 billion), Mexico ($400 billion), China ($427 billion, 2023, U.S. Census)—face $1.3 trillion in tariff exposure (PBS News, February 3). NZ’s $5 million diaspora trade (INZBC 2024) watches closely.

Retaliation

• Canada: Announced a two-stage response on March 4—25% tariffs on $110 billion in U.S. goods (cars, trucks, steel)—phase two pending (X @JoumannaTV). Historical retaliation hit $12.6 billion (2018, Investopedia).
• China: Imposed 15% tariffs on U.S. agricultural goods (meats, grains, dairy) and plans a WTO lawsuit (X @JoumannaTV). 2018’s $27 billion export loss (USDA) sets precedent—$6 billion in U.S. crude oil imports targeted (Reuters, February 5).
• Mexico: Vowed unspecified retaliation—2018’s $3 billion in U.S. goods hit (Investopedia)—Sheinbaum calls it unjustified (Reuters, March 5).

NZ Context

• Trade: NZ’s $190 billion exports (Stats NZ 2024)—$2 billion with Bharat—face indirect risks. Dairy ($20 billion) and meat ($10 billion) could gain if U.S.-Canada trade falters (interest.co.nz, February 1).
• Kiwi Dollar: NZD at $0.5707 (Reuters, February 20)—down 0.4% to $0.564 (interest.co.nz, February 1)—softens import costs, boosts exports.

Implications

Global Economic Impact

• U.S.: Tariffs could shrink GDP by $255 billion (Peterson Institute, NBC News, February 2)—$1,000/household cost rise (Reuters, March 5). Autos up $3,000/car; groceries—60% of U.S. veg from Mexico—rise 10% (CFR, February 5).
• Canada/Mexico: 70% of GDP trade-reliant—$200 billion GDP hit (Peterson Institute); recession risk looms (Reuters, February 2). Canada’s $437 billion exports to U.S. (Stats NZ 2024) falter.
• China: 2.5% GDP trade exposure—$55 billion hit (Peterson Institute)—less severe, per Russell Investments (February 4). $1 trillion trade (FICCI 2024) diversifies.
• NZ: 0.1% income drop ($322 million, AUT News, February 13)—$163/household—$5 billion diaspora trade (INZBC 2024) adapts.

Trade Diversion

• Stats: U.S. imports from Mexico rose $850 million post-2018 China tariffs (IMF, 2019)—NZ could see $1 billion export gains (AUT News, February 13). Bharat’s $2 billion NZ trade (Stats NZ) may shift—$5 million diaspora deals pivot.
• Risks: Retaliation widens—$30 trillion global trade (WTO 2024) shrinks 15% if universal tariffs hit (Bloomberg Economics, CFR, February 5).

Inflation and Jobs

• U.S.: $100 billion tariff revenue (Tax Foundation, March 5)—223,000 job losses (Tax Foundation, June 2024). Gas up 50 cents/gallon (CFR, February 5).
• NZ: $1.5 billion trade (NZIER) softens—$5 billion diaspora imports costlier, per interest.co.nz (February 1).

Impact on New Zealand

Economic Data

• Exports: $190 billion (Stats NZ 2024)—$20 billion dairy, $10 billion meat—$2 billion Bharat trade stable. $5 million diaspora trade (INZBC 2024) eyes opportunities.
• Imports: $62 billion (Stats NZ Q4 2024)—U.S. ($4.7 billion) down $1 billion if tariffs escalate (AUT News, February 13).
• NZD: $0.564 (interest.co.nz, February 1)—$1 trillion Bharat trade (FICCI 2024) gains competitiveness.

Opportunities

• Trade Advantage: Weak NZD boosts dairy/meat—$1 billion potential gain (interest.co.nz, February 1). Bharat’s $50 billion exports (FICCI) align—$5 million diaspora links grow.
• Risk Mitigation: $1.5 billion trade (NZIER) diversifies—MFAT monitors (interest.co.nz, February 1).

Challenges

• Demand Softness: U.S./Canada slowdown cuts $5 million diaspora exports (NZB News estimate)—$190 billion NZ exports (Stats NZ) vulnerable.
• Global Volatility: $30 trillion trade (WTO) disruption—$1 billion NZ culture (NZIER) adjusts.

Data and Stats

• U.S. Tariffs: $1.3 trillion imports hit—25% Canada/Mexico, 10% China (PBS News, February 3). $100 billion revenue (Tax Foundation).
• Retaliation: Canada $110 billion (X @JoumannaTV); China $6 billion crude (Reuters, February 5)—2018: $27 billion U.S. loss (USDA).
• NZ Impact: $322 million income drop (AUT News)—$190 billion exports, $62 billion imports (Stats NZ 2024).
• Historical: 2018 U.S.-China—0.2% GDP loss, 245,000 jobs (Tax Foundation); NZ +5% China exports (Stats NZ 2019).

Excerpt

The U.S.-China-Canada tariff war—rooted in 1930s protectionism, flared in 2018, and reignited March 4, 2025—reshapes global trade. $1.3 trillion in U.S. imports face duties—$255 billion GDP hit (Peterson Institute)—while Canada’s $110 billion and China’s $6 billion retaliations echo 2018’s $27 billion U.S. losses (USDA). NZ’s $190 billion exports (Stats NZ) and $5 billion diaspora (NZIER) navigate a $322 million income dip (AUT News)—opportunities in dairy ($20 billion) and risks in demand loom. Bharat’s $1 trillion trade (FICCI) and NZ’s $2 billion link (Stats NZ) brace—$30 trillion global trade (WTO) teeters. Data says: diversify, adapt—NZ’s resilience is key.