February 2023: The Announcement Phase

On February 1, 2023, President Donald Trump declared a series of trade tariffs, imposing a 25% levy on imports from Canada and Mexico, with Canadian energy imports subject to a reduced tariff of 10%. This action was coupled with the introduction of 10% tariffs on Chinese goods. In retaliation, Canada announced a 25% tariff on approximately C$30 billion (around US$20 billion) worth of US imports, with further escalation planned to C$155 billion after three weeks. Both Mexico and China indicated they would implement their own countermeasures, with China specifically promising “necessary countermeasures.” Interestingly, Trump refrained from applying tariffs on European Union (EU) imports, despite previous threats.

By February 3, just hours before the tariffs were set to take effect, Trump postponed the levies on Canada and Mexico for one month. In response, European leaders prepared retaliation strategies against potential US tariffs.

The situation escalated on February 4, with the effective date of the 10% tariffs on Chinese imports. Following this, China imposed tariffs on US goods valued at about $14 billion and reopened antitrust investigations into prominent tech companies like Google and Nvidia.

New Tariffs and Shift in Strategy

On February 10, Trump announced the planned imposition of 25% tariffs on steel and aluminum imports, set to begin on March 12. This was followed on February 14 by a proposal for “reciprocal” tariffs on all trading partners, whether allied or adversarial. By February 26, tension mounted as Trump threatened the EU with a 25% tariff, asserting that the bloc was “formed to screw the United States.”

March 4 marked a significant escalation, as Trump’s tariffs against Canada, Mexico, and China, first announced on February 1, took effect. Furthermore, Trump doubled existing tariffs on Chinese imports to 20%. In retaliation, China threatened to impose 10-15% tariffs on US agricultural products starting March 10, while Canada activated its countermeasures.

Carve-Outs and Challenges

On March 5, Trump made concessions by offering a month-long exemption from the 25% tariffs for car manufacturers compliant with the USMCA trade deal. This carve-out was later extended on March 6 to encompass all goods from Canada and Mexico meeting USMCA standards, with April 2 designated as “liberation day.”

However, tensions continued to escalate, particularly on March 10, when Ontario, Canada implemented 25% tariffs on electricity exports to three US states and hinted at shutting down power if faced with US retaliation. Trump quickly responded by doubling tariffs on Canadian steel and metals to 50%, yet both parties moderated their stances the following day.

Retaliation and Further Actions

March 12 saw Canada and the EU announce retaliatory tariffs against Trump’s steel and aluminum duties. On March 24, Trump introduced additional 25% tariffs on all imports originating from countries purchasing Venezuelan oil, set to take effect April 2. Shortly thereafter, on March 26, the administration announced further tariffs on foreign-made cars and car parts, which incited threats of retaliation from the US’s closest trading partners.