• President Trump prioritizes tariffs over trade deals, signaling a shift in U.S. trade policy.
  • New tariffs target China and the EU, with retaliatory measures already announced.
  • Economic impact begins to show as U.S. GDP contracts in Q1 2025.

A Tariff-First Approach

President Trump has made it clear that trade deals are no longer a priority for his administration, opting instead for a aggressive tariff strategy. Since returning to office in 2025, he has signed multiple executive orders imposing steep tariffs on imports, particularly from China and the EU.

On March 24, 2025, Trump granted the Secretary of State broad discretion to impose a 25% tariff on select goods. Weeks later, on April 8, he targeted Chinese imports that previously qualified for de minimis exemptions, effective May 2. The administration didn’t stop there—goods shipped via international postal networks from China will soon face duties of up to $150 per item by June 1.

Escalating Tensions with the EU

The EU has found itself squarely in the crosshairs of Trump’s trade policy. A blanket 20% tariff on EU products was initially threatened in February and delayed until July 9, but the administration has since upped the ante. On March 13, Trump floated an additional 25% levy on unspecified goods, while EU alcohol—including champagne and wine—could be hit with a staggering 200% tariff.

Brussels hasn’t taken these threats lightly. The EU has drawn up retaliatory measures, including duties ranging from 4.4% to 50% on $8.6 billion worth of U.S. goods, though implementation has been postponed until mid-July. Further escalations are planned for August and December if tensions persist.

Economic Fallout Begins

These protectionist measures coincide with a 0.3% contraction in U.S. GDP during Q1 2025, though analysts debate how much tariffs contributed to the decline. States like California, heavily reliant on trade with China and Mexico, are particularly vulnerable.

“We don’t have to sign trade deals to get what we want,” Trump reportedly told advisors last week, according to people familiar with the matter. The White House did not respond to requests for comment on whether this stance would soften if economic conditions worsen.

What’s Next?

With no signs of backing down, the administration’s tariff-heavy approach risks further straining global supply chains and diplomatic relations. As retaliatory measures take effect later this year, businesses on both sides of the Atlantic are bracing for higher costs and potential disruptions. For now, the era of sweeping trade agreements appears to be on hold—replaced by the blunt instrument of tariffs.