Trump Trade War Briefing: China, Mexico, Canada, & Europe

What are the latest measures and countermeasures US trading partners have to President Donald Trump's Tariffs?

The geopolitical game of chess begins as trade tensions under Trump have intensified. The U.S. has imposed a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods, aiming to shrink the trade deficit and pressure key partners into concessions on trade, immigration, and drug trafficking.

China responded with tariffs on U.S. oil and an antitrust probe into Google. More significantly, Beijing imposed export controls on critical minerals—gallium, germanium, and antimony—essential for semiconductors and military technology.

This follows earlier restrictions on graphite and rare earth elements for magnet production. By weaponizing its dominance in these supply chains, China is signaling its readiness to disrupt U.S. industry and escalate the trade war. It has warned of “necessary countermeasures,” making clear the conflict could extend further.

Canada and Mexico initially retaliated but ultimately capitulated to U.S. demands. Ottawa matched U.S. tariffs on $155 billion of goods but also agreed to establish a fentanyl czar, addressing one of Washington’s key concerns. Mexico, meanwhile, secured a 30-day pause on tariffs by pledging stronger border enforcement against drug trafficking and illegal immigration.

However, the threat of “Plan B” tariffs remains if the U.S. does not lift restrictions, showing that Mexico is prepared to retaliate if talks collapse.

The European Union, though not yet targeted, has been put on notice. Trump has hinted that similar actions could follow if the EU does not revise its trade policies. Brussels is preparing for potential fallout, especially as global economic uncertainty grows.

Markets have reacted. Asian shares have slipped as investors weigh the risks of inflation and slower growth. U.S. businesses are bracing for higher costs, which could push consumer prices higher across multiple sectors, from retail and food to automotive and agriculture.

Interested in understanding Trump’s foreign and domestic policies and how it affects China’s grand strategy and global supply chains? All that and more here:

• US-China Tech War Escalates

• Decoding Trump's Foreign Policy: Part II

• Decoding Trump’s Foreign Policy: Part I

• What to Expect From a Trump Presidency?

• What is China's Grand Strategy for Asia?