How Trump’s Tariffs Could Hit Your Wallet
The Trump administration introduced new tariffs on April 2, a day President Trump has named "Liberation Day." Economists believe this is part of his "America First Trade Policy," which he started on his first day in office with a stated goal of helping strengthen U.S. manufacturing. Here's what you need to know about these new tariffs.
Recent Tariffs Shake the World
On April 2, 2025, Trump announced his official plans for "reciprocal tariffs," according to CNBC, which he believes are necessary to correct trade imbalances with countries that export more to the U.S. than they import from America. However, economists say adding tariffs to many imports could lead to a global trade war, which might raise prices for U.S. consumers and increase inflation in the short term.
Almost every country is subject to a 10% tariff. The European Union faces 20% tariffs, while China has 34% — though that number is expected to increase to 104% soon, as new duties are being added to Chinese electric vehicles, steel, and solar products. Vietnam has one of the highest with 46%
In recent weeks, President Donald Trump also announced 25% tariffs on automobiles manufactured outside the U.S., as well as 200% on Champagne and other spirits from the European Union; those tariffs are now in effect.
A tariff, also known as a duty, is a tax that governments place on the value of imported goods, including shipping and insurance costs. It's not unusual for countries to apply different tariffs to various products.
Tariff on Vehicles and Parts
According to a March 26 announcement, a 25% tariff will be placed on all vehicles and vehicle parts not made in the U.S. which started on April 3. Even cars made in the U.S. could be taxed if they have foreign parts, but only on the portion of the car that is made of those parts.
One of the key issues is how cars covered by the United States-Mexico-Canada trade agreement will be taxed. While the point of the tariff is to encourage more cars to be made in the U.S., the decision has caused worry among car manufacturers who rely on global supply chains to build their vehicles.
Tariff on Alcohol
On March 13, Trump announced plans for a 200% tariff on alcohol from France and other European countries, marking a new increase in global trade tensions. This U.S. tariff appeared to be a response to the European Union's decision to bring back an import tax on American whiskey. Europe's top wine producers, who might face huge costs if the tariff is put in place. Italy, France, and Spain are among the top wine exporters to the U.S. Trump made his warning to Europe's alcohol industry after the E.U. announced a 50% tax on American whiskey, which begin on April 1.
The current tariffs have only placed a 20% tariff on European alcohol at this time, the threat of a 200% tariff is not off the table; that decision is expected around April 14.
Hoping to Settle
Italian wine industry executives hope negotiators in Brussels and Washington can settle the growing trade dispute. The U.S. is Italy's biggest wine market, with sales tripling in value over the past 20 years. Italy's main farming group, Coldiretti, reported wine exports increased by nearly 7% in 2024, reaching over 2 billion euros ($2.2 billion). The U.S. market, known for strong Italian wine sales, would be difficult to replace, said Piero Mastroberardino, vice president of Federvini, Italy's national winemakers' group.
Oil and Gas
On March 24, Trump announced a 25% tariff on countries that buy oil or gas from Venezuela. That tariff is now in effect.
In initial the announcement, Trump also extended the deadline to May 27 for Chevron pull out of its operations in Venezuela. China imported 68% of Venezuela's oil in 2023, according to the U.S. Energy Information Administration. While it's unclear how the U.S. will enforce the tariff, these two actions temporarily shift Trump's focus onto countries, like China, that buy Venezuelan crude oil instead of the U.S.
"The United States has long abused illegal unilateral sanctions and so-called long-arm jurisdiction to grossly interfere in the internal affairs of other countries," said Guo Jiakun, spokesperson at the Chinese foreign ministry, on March 25, as reported to Reuters. "China firmly opposes this."
'The Big One'
For the Trump administration, placing tariffs isn't new. During his first term, the U.S. was involved in a trade war with China. In his second term, Trump is using a similar approach, but now with virtually every U.S. trading partner.
"For DECADES we have been ripped off and abused by every nation in the World, both friend and foe. Now it is finally time for the Good Ol' USA to get some of that MONEY, and RESPECT, BACK. GOD BLESS AMERICA!!!" Trump said about his plans in a recent post on Truth Social, as reported by CBS News.
Trump's tariffs are part of his effort to protect American businesses and reduce trade imbalances with other countries. While his "America First" policy aims to support U.S. manufacturing, it could also lead to higher prices for consumers and create tension in global trade. As these new tariffs take effect, it will be important to see how they impact both the U.S. economy and relationships with other nations.
References: Here Are the Automobile Makes and Models That Would Be the Most Affected by Trump's Tariffs | Trump Threatens to Put 200% Tariff on French Champagne and Other EU Spirits | From 200% Tariff on European Wine to 25% on Auto Imports — A Timeline of Donald Trump's Trade War | Trump's 200% Tariff Threat Would Be 'a Real Disaster' for Europe's Wine Industry | Trump to Hit Venezuelan Oil Buyers With Tariff, Extends Chevron's Wind Down | Trump Says He's Planning More Tariffs on April 2, Calling it "Liberation Day." Here's What It Means. | See Trump's list: More than 180 countries and territories facing reciprocal tariffs | Auto tariffs are now in effect. What it means for America - and you | How the Latest Wine Tariffs Could Crush the Wine Industry | Global Tariff Finder | Trump tariffs live updates: 104% tariff rate on China to go into effect Wednesday
