Trump signals tariff-heavy China policy as trade war looms

Trump declared national emergencies on Feb. 1, 2025, regarding fentanyl trafficking from Mexico, Canada, and China, invoking the International Emergency Economic Powers Act (IEEPA) to impose 25% tariffs on Mexico and Canada and 10% on China. The tariffs took effect Feb. 4, 2025. Trump justified the China tariff by claiming Chinese fentanyl precursors were being smuggled into the U.S. through Mexico. The IEEPA allows presidents to regulate commerce during national emergencies, though critics argue fentanyl doesn't constitute the type of emergency the law intended.

Trump increased the China tariff from 10% to 20% on Mar. 4, 2025, claiming China failed to stop fentanyl production and export. He then announced 'reciprocal tariffs' on Apr. 2, setting rates as high as 50% based on trading partners' trade balances with the U.S. China faced a 50% reciprocal tariff initially, bringing the total China tariff to 70% when combined with the 20% fentanyl tariff. The reciprocal tariff framework applied to all U.S. trading partners, with rates varying by country.

From Jan. to Apr. 2025, the overall average effective U.S. tariff rate rose from 2.5% to 27%, the highest level in over a century. This surpassed tariff rates from the 1930 Smoot-Hawley Tariff Act, which economists blame for deepening the Great Depression. The rapid increase disrupted global supply chains and raised consumer prices. After negotiations and deal-making, the overall average effective tariff rate fell to 16.8% by Nov. 2025, still dramatically higher than pre-2025 levels.

China retaliated against Trump's tariffs by imposing its own tariffs on U.S. goods throughout 2025, targeting agricultural products, aircraft, automobiles, and other exports. Chinese tariffs hit American farmers especially hard, reducing demand for soybeans, corn, pork, and beef. The retaliation mirrored China's response during Trump's first-term trade war, when China slashed purchases of U.S. farm products. Farmers lobbied Trump to reach a deal that would restore market access.

On Oct. 10, 2025, Trump announced he would impose an additional 100% tariff on China starting Nov. 1 as punishment for China's export controls on rare earth minerals. China had restricted exports of critical minerals used in electronics, batteries, and military equipment. Trump characterized this as economic warfare. But on Oct. 26, a 'framework' of a deal with China was achieved, averting the 100% tariff implementation. The Oct. crisis showed how quickly tariff threats could escalate.

In Nov. 2025, Trump and Chinese President Xi Jinping reached a significant trade agreement. China suspended all retaliatory tariffs announced since Mar. 4, 2025, including tariffs on a vast swath of U.S. agricultural products: chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products. China also agreed to purchase at least 12 million metric tons of U.S. soybeans during the last two months of 2025 and at least 25 million metric tons annually in 2026, 2027, and 2028.

The Nov. deal left in place the current 20% 'fentanyl' and 10% 'reciprocal' tariffs on Chinese goods, for a total of 30% on Chinese imports. This became the baseline U.S.-China tariff rate. The deal didn't eliminate tariffs but prevented further escalation. American consumers and businesses continued paying higher prices on Chinese goods. The 30% tariff represented a permanent increase from the pre-2025 rate of approximately 2.5%.

On May 28, 2025, the Court of International Trade declared Trump's executive orders implementing both the 'fentanyl' tariffs on Canada, China, and Mexico and the 'reciprocal' tariffs invalid as contrary to law. The court ruled that Trump exceeded his authority under IEEPA and other trade statutes. The administration appealed to the Federal Circuit. Despite the ruling, tariffs remained in effect pending appeal. The case challenged whether presidents can unilaterally impose sweeping tariffs without congressional authorization.