At midnight Eastern Time, the United States implemented a sweeping package of new tariffs under orders from Donald Trump, targeting imports from Canada, Switzerland, the Netherlands, and several other trading partners. The move has triggered swift condemnation from affected governments and renewed concerns over a return to protectionist trade policy.
A return to tariff diplomacy
The tariffs, which range from 10% to 25% on selected goods including pharmaceuticals, precision machinery, and certain foodstuffs, are framed by Trump’s team as necessary to “restore fairness” and reduce the US trade deficit. Speaking at a campaign event shortly before the announcement, Trump declared: “For too long, countries have taken advantage of American strength. Tariffs are how we fight back.”
This marks a significant escalation in trade tensions with key US allies. While previous administrations focused on multilateral dispute resolution through institutions like the World Trade Organisation (WTO), Trump has doubled down on unilateral economic pressure. The new measures come just weeks after his pledge to impose tariffs on China “across the board” if re-elected in November.
Targeting traditional allies
Canada, one of the United States’ largest trading partners, expressed disappointment and warned of countermeasures. Prime Minister Mélanie Joly stated that the Canadian government would “respond firmly and proportionately,” though she stopped short of announcing specific retaliatory steps. Switzerland and the Netherlands, both significant sources of advanced manufacturing imports into the US, also issued statements criticising the move as unjustified and potentially in violation of WTO rules.
European officials have voiced concern that the tariffs are being imposed with little to no consultation, eroding trust among transatlantic allies. Analysts note that smaller but advanced economies like Switzerland are often caught in the middle of Washington’s broader trade posture toward the European Union.
Economic and market impact
Markets reacted cautiously but did not panic. US futures dipped slightly in early Asian trading hours, and the Canadian dollar fell modestly against the US dollar. However, investors appear to be pricing in the likelihood that some of the measures may be challenged or watered down before enforcement begins in full.
Trade economists warn that the long-term impact could be substantial. “Tariffs on precision goods from countries like Switzerland don’t just hurt exporters — they disrupt supply chains that US manufacturers rely on,” said Dr. Anne Wolf of the Brookings Institution. The US pharmaceutical and medical device sectors, in particular, are expected to see cost increases.
Strategic implications ahead of November
With the US presidential election just three months away, the tariffs are widely seen as a political manoeuvre to energise Trump’s economic nationalist base. Aides close to the campaign have hinted that further measures may follow, including tariffs on European luxury goods and renewable technology components.
Foreign ministries in Ottawa and Bern have called for urgent talks, while some EU leaders are reportedly considering launching a formal complaint at the WTO. Whether these tensions escalate into a broader trade conflict will depend on the Biden administration’s response and the outcome of November’s vote.
For now, the global trading system braces for another round of volatility as Washington returns to the economic battlefield it left in 2020.
REFH – Newshub, 1 August 2025
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