2025 U.S. Tariffs on Canada, Mexico, Asia, and EU
What it Means to Retailers & Manufacturers, and how they Can Respond
February 2025
White Paper Overview
There has been much discussion around the 2025 Tariffs being proposed by the current Administration. There is some confusion regarding the countries and products affected, the tariff purpose, and potential impact to U.S. companies.
The purpose of this white paper is to clarify some of the confusion around the tariffs and discuss the following from T Exponents’ perspective:
Provide an overview (Description & Purpose) of 2025 Tariff by category
Discuss scenarios on how tariffs can play out
Discuss how retailers and manufacturers can respond to the tariffs.
2025 Tariff Category Overview
In February 2025, the current admin discussed the following tariffs categories:
Reciprocal tariffs
Country-specific tariffs
Product-specific tariffs.
Details for each of these tariff categories is provided below.
Reciprocal Tariffs:
Description: Reciprocal tariffs are often country-level taxes imposed on goods imported from another country for the same exact amount.
Purpose: Reciprocal tariffs can help reduce trade deficits by matching tariffs or forcing the foreign country to reduce their tariff. In theory, this would help reduce the U.S. Trade deficit, increase U.S. manufacturer, farmer, and retailer revenue, and improve the overall U.S. economy. There are factors that could impact this theory and there is much debate as to how effective this would be.
Examples and supporting charts of reciprocal tariffs are shown below:
U.S. versus European Union Auto Tariff: U.S. levies 2.5% while E.U. has a 10% tariff on U.S. imported
U.S. versus Brazil Ethanol Tariff: U.S. import tax is 2.5% while Brazil charges an 18% rate on US ethanol exports.
The WTO chart below demonstrates the import tariff gaps between U.S. and several key Asian trading partners.
