Trade war 2.0: Donald Trump’s sweeping tariffs to hit China, Mexico, Europe next

The Donald Trump administration could reignite its trade war against China with tariff hikes that may redefine global trade dynamics. Nomura analysts predict Chinese imports will face a cumulative tariff increase of 35 percentage points, potentially pushing rates as high as 60%. “Broader tariffs, especially on consumer goods, appear imminent,” the report notes, signaling a shift from earlier trade measures under Trump’s first term. The administration also hinted at new levies of 10–20% on imports from Europe and Asia, while Mexico faces a potential 5% hike.

Trump's second term is expected to target China aggressively. Consumer goods, previously left untouched, are likely to be included in the tariff expansion. Current tariffs on Chinese goods stand at approximately 10–11%, a figure set to soar under Trump’s proposed framework. Analysts expect these measures to be implemented gradually over three phases, mirroring Trump’s 2018–19 negotiation strategy. This stepwise approach aims to apply consistent pressure on China without disrupting U.S. domestic markets abruptly.

Nomura’s report emphasizes that additional tariffs could be rolled out quickly under Section 301. The Biden administration’s four-year review of Chinese tariffs ensures Trump’s team inherits a ready-made structure for rapid implementation. Should Congress get involved, the process may slow, with discussions on revoking China’s permanent normal trade relations (PNTR) status potentially delaying immediate action.

China isn’t the sole target. Trump has proposed 10% tariffs on European and Asian imports and 5% on Mexican goods. The International Emergency Economic Powers Act (IEEPA) could be invoked for swift, sweeping action, bypassing traditional legislative hurdles. This authority allows the president to impose broad restrictions on imports under national emergency provisions.

The administration also plans to tighten the “de minimis” exception, which exempts low-value shipments from tariffs. This move, backed by bipartisan support, could generate an additional $40–50 billion annually in tariff revenue.

The new tariff regime could expand beyond trade deficits, aiming at issues like fentanyl imports and border security. Trump’s strategy may also push trading partners to align their tariff rates with U.S. exports, potentially reshaping trade policies globally.