Approximately 20% of global exported goods are levied with customs tariffs
In a significant shift from the previous era of trade liberalisation, the United States has imposed steep tariffs on goods imported from its trading partners, causing a surge in trade barriers and fuelling a fragmented global trade environment.
Currently, the US has implemented a 10% minimum tariff on most goods from most countries, a move that was first announced in May 2025. This baseline level of protectionism is expected to persist even after negotiations conclude, as demonstrated by the recent US-UK agreement, which maintains the 10% tariff on most goods despite the US running a trade surplus with the UK.
The tariffs have led to retaliatory measures, particularly from China, with tariffs on Chinese goods doubling compared to early 2025 figures, and China raising tariffs on US goods by over 50%. This tit-for-tat escalation threatens to ignite what some analysts describe as the largest trade war in history.
The trade conflict extends beyond tariffs, with investment restrictions also playing a significant role. For instance, there are limitations on Chinese stock listings in the US and restrictions on Chinese investments in US private equity. This broad set of barriers is part of a wider geopolitical and economic competition that is fragmenting the global trading system into blocs led by the US, China, and the EU, each with its own trade rules and alliances.
As the deadline for reaching agreements approaches on July 9, the outcome remains uncertain. Negotiations are ongoing with multiple countries, but the current trajectory suggests that moderate to severe restrictions on trade and investment will remain in place, especially between the US and China. Neutral countries are increasingly pressured to take sides in this escalating conflict, complicating prospects for broader trade liberalization.
Furthermore, the tariff moratorium, which applies only to goods and not services, is nearing its end. While it is unclear whether US President Donald Trump may extend the moratorium for some countries, a resurgence in the trade dispute between the US and various countries seems imminent.
These developments mark a significant departure from the past and suggest a more protectionist and fragmented global trade environment going forward. It is crucial to monitor these developments closely as they unfold and assess their potential impact on businesses and economies worldwide.
The ongoing trade conflict between the US and its trading partners, as a result of the imposed tariffs, has led to a rise in protectionist measures, significantly affecting the general-news landscape. This shift in trade policies, including the 10% minimum tariff on most goods from various countries, is causing disruptions in business relationships and foster a contentious political climate, especially in relation to finance, where lots of investments are at stake.
