Trump has described these uniform tariffs as a countermeasure to combat the flow of the designer drug fentanyl coming into the US from China by way of Mexico, for example. Yet there many well be other aims involved, such as countering the flow of cheap Chinese goods into the US from places like Canada and Mexico, as well as reducing the US’s trade deficit. Going forward, Trump is likely to adopt a strategy which entails imposing flat tariffs on other nations as needed, with the intention of both solving individual problems and slashing the country’s trade deficit.
 Trump firmly intends to reduce the US’s trade deficit. If we look at the percentage values of consumer goods imports by country between January and October 2024 (according to the US Census Bureau's International Trade statistics), we see that Mexico took the top spot at 15.5% of all US imports, followed by China in second place at 13.9%, and then Canada in third at 13.5%. Trump intends first of all to impose tariffs across the board on the top three countries supplying US imports as a means of cutting the trade deficit.
The US signed the USMCA (United States-Mexico-Canada Agreement) with Mexico and Canada as the successor to NAFTA (North American Free Trade Agreement). That accord took effect in 2020. However, Trump has expressed severe dissatisfaction with the fact that automobiles and other finished products using Chinese parts are entering the US via Mexico and Canada without being taxed, as a sort of loophole. The USMCA is up for review in 2026, but it’s possible that Trump will seek to conduct that review ahead of schedule.
The fact that Trump has taken this stance toward levying tariffs even on friendly nations that have signed a trade agreement with the US arguably demonstrates how strongly determined he is to cut the country’s trade deficit.

Among his campaign promises, Trump pledged to impose a tariff upward of 60% on all goods imported from China, and to also place an across-the-board 10-20% tariff on imports coming from all other countries. If those 60% and 10% tariffs are rolled out, the US’s average tariff rate on imports would rise by 16.6%, reaching a level of around 20%.
Meanwhile, if a 10% tariff is levied on all Chinese imports and a 25% tariff gets imposed on all goods coming from Canada and Mexico, as was just announced, the average tariff rate would climb by 8.2%. This alone would raise the average tariff rate by around half of the increase that was proposed in the campaign. While the scope of this latest additional tariff rate hike on all Chinese goods is just 10%, there would seem to be a good chance that further tariff hikes could be announced down the road. In that case, it’s fully conceivable that the overall scope of the tariffs could approach what was laid out in the initial plan proposed by Trump on the campaign trail.
Although these across-the-board tariff measures would seem to effectively be targeting the US’s top three trading partners based on overall import value between January and October 2024, the next potential targets could be Germany, the fourth highest supplier of US imports (5.2% of all US imports), as well as Japan in fifth place (4.7%), Vietnam in sixth (3.7%), South Korean in seventh (3.7%), and Taiwan in eighth (2.8%), for example.
In any event, it’s very unlikely that these latest measures to be announced will mark the last such across-the-board tariffs that the Trump Administration will propose, and we should expect that more such measures will be forthcoming sooner or later.
Given that the tax cuts, deregulatory measures, and other economic policies proposed by Trump will require Congressional approval, it will be quite some time before those moves are actually implemented. We may expect that Trump will thus prioritize reinforcing these tariffs, as well as other measures including immigration regulations, which he can carry out under his own authority.

Mexican president Claudia Sheinbaum has expressed that if Trump moves to implement across-the-board tariffs, she will take retaliatory measures similar to those taken back in 2018. When Mexican steel exports bound for the US were hit with tariffs in 2018, Mexico responded by slapping equivalent tariffs on imported steel made in the US. Furthermore, Mexico also imposed tariffs on other American products such as pork, cheese, apples, and bourbon. These were retaliatory measures targeting electoral districts that strongly favored the Republican party. Ultimately, the two countries agreed to withdraw the tariffs on each other, and this back-and-forth retaliatory exchange came to an end.
Canada’s Prime Minister Justin Trudeau has also noted how in response to the tariffs placed on steel and aluminum products by the Trump Administration back in 2018, Canada retaliated with its own tariffs on a targeted list of products such as Harley Davidson motorcycles, playing cards, and Heinz ketchup, ultimately causing the US to rescind its tariffs, and he has suggested that Canada could take similar retaliatory measures again now.
In addition, any tariffs on Mexico and Canada would likely drive up the prices of steel and aluminum in the US. This is because Canada and Mexico are major suppliers of these materials for the US market. The US also buys nearly all the crude oil exported by Canada. Further, Canada is the source of around 60% of the crude oil imported by the US. If additional tariffs were imposed, they would cause energy prices to rise in the US, likely dealing a blow to the US economy.
It’s often said that nobody wins in a trade war. That’s because the country that puts trade sanctions in place also feels their sting as a result.

Much as he did during his first administration, Trump seems inclined to pursue economic policies based on his own intuitions as businessperson. Trump appears to conceive of the country’s trade deficit as akin to a deficit run by a company—in other words, as a loss—and to believe that reducing the country’s trade deficit will mean a proportional boost to US GDP.
In actuality, however, if additional tariffs lead the prices of all parts and materials imported from overseas to rise, they will deal a huge blow to the US companies that use those items for their own manufacturing, or to Japanese and other foreign companies that manufacture in the US. It’s no simple matter for companies to rapidly shift their procurement over to parts and materials produced within the US. These sorts of supply chain problems will be a major impediment to manufacturing activities in the US.
If companies can’t switch their supply sources for parts and materials, they will have to continue using parts and materials made more expensive by the tariffs, which will drive up their manufacturing costs proportionally. Those costs will be passed on to their product prices, ultimately to be borne by US consumers, and therefore this will mean a serious blow to domestic consumption. For this reason, it can’t simply be said that US GDP will rise if additional tariffs are rolled out.
This “winner-take-all” approach by Trump, which aims to reduce the US’s trade deficit and increase GDP, may well in fact end up seriously harming the US economy.
Prior to the presidential election, economists were strongly sounding the alarm bells about the risks posed by Trump’s economic policies, but Trump has brushed those warnings aside, instead filling his key cabinet posts with yes-men. There already seems to be no one left who can fix these dangerous Trump-style economic policies rooted in the businessperson mentality. This also poses a major risk for global economic prospects.

EV giant Tesla's CEO Elon Musk, who threw his full support behind Trump in the election (donating $180 million to his campaign, for instance), can be expected to wield significant influence in the second Trump Administration.
 Musk and Vivek Ramaswamy, an entrepreneur and former executive at a biotechnology firm, have been tasked to head a new Department of Government Efficiency (DOGE), as Trump publicly announced on November 12. The name DOGE is the brainchild of Musk, taken from the cryptocurrency known as Dogecoin of which he himself is a proponent.
According to Trump, the role of this new organization will be to “dismantle bloated government bureaucracy, slash excessive regulations, cut wasteful expenditures, and restructure federal agencies”.
As for how this new department will function, Trump has said it will “provide advice and guidance from outside of government”, implementing large-scale structural reforms in collaboration with the White House as well as the Office of Management & Budget (OMB). In other words, DOGE is not a government agency, and its role is expected to be more like that of an advisory body for the government.
Since acquiring the social media website Twitter (now X), Musk has built a track record of drastic restructuring, laying off large numbers of employees. He has also been a vocal critic of wasteful government spending and regulations.
Musk and Ramaswamy have also indicated their intent to do away with remote work for federal employees and to require them to come to the office five days a week. This itself is a kind of restructuring measure, anticipating a sharp rise in the number of persons voluntarily resigning in protest. Such an aggressive downsizing method is apt to be widely condemned.

While DOGE could potentially usher in the kinds of administrative and financial reforms that couldn’t be accomplished earlier, relying on this push from “outside”, it would also seem to come with two problems of its own.
The first is Musk’s conflict of interest. In terms of the companies he leads, US space development firm Space X alone has over $15 billion worth of contracts with the federal government, and according to a survey done by the New York Times, Musk’s companies are the targets of at least 20 federal regulatory agencies.
People will inevitably suspect that Musk is seeking to use to DOGE as a way of promoting government organizational changes, administrative affairs, and even deregulation that will be favorable to the companies he runs. The signs of this are already visible. The next Trump Administration is reportedly considering easing regulations for self-driving cars, and if that were to happen, it would create a strong tailwind for Tesla, which is developing self-driving vehicle technology and of which Musk is the CEO.
The second problem is the adverse economic effects that would result from slashing the federal budget. Trump has described DOGE’s role as being to “drive out the massive waste and fraud which exists throughout our annual $6.5 trillion of government spending”. By contrast, Musk plans to cut $500 billion in annual spending from the federal budget.
Should that happen, the cuts would equal roughly 7.7% of the federal budget, or around 1.7% of annual nominal GDP. This could perhaps considerably degrade the US economy.

In response to Trump’s victory in the presidential election, the value of the dollar appreciated in the financial markets. This is the so-called “Trump Trade”. It reflects expectations that Trump’s proposed tax cuts and deregulatory policies will have positive effects on the US economy, that these tax cuts will cause the federal deficit to grow and drive up long-term interest rates, and that the adoption of new tariffs will enhance the supremacy of the US economy relative to other nations, while also increasing domestic inflationary risks and raising long-term interest rates.
However, this reaction in the markets would seem to some extent to underestimate the adverse impact that large-scale tariffs would have on the US. In addition, if major cuts to government spending are made under DOGE, they could even lead the US economy to slow down.
And if the financial markets were to perceive such a risk, fears of a recession could cause stock prices to plummet, while mounting speculations over monetary easing could cause the Japanese yen to reverse its slide and appreciate against the US dollar in the exchange markets.
 Trump intends to leverage the president’s authority to the greatest extent possible, decisively imposing across-the-board tariffs abroad while implementing administrative and financial reforms at home. Yet those attempts run a high risk of causing major disruptions both domestically and overseas. This could well pose a high risk for the global economy in 2025 and even thereafter.