Which Countries Would Get Hit Hardest by Donald Trump’s Tariffs?

Donald Trump has promised to impose tariffs on imported goods as part of his economic agenda in his second term. While China stands to be punished the hardest, other countries, including U.S. allies, are also set to be impacted.

The president-elect ran on a pledge to use tariffs to boost American businesses, with up to 60 percent duties on Chinese goods and up to 20 percent on imports from other countries.

Although all tariff policies will need approval from Congress, many economists have already begun speculating on the impact they will have on the global market.

“While (Trump’s tariff policy) stands to affect the trade relationship with China more intensely, it is expected to affect trading relations with the EU as well,” Dr. Rishav Bista, associate professor of economics at Texas Christian University, told Newsweek.

Similarly, Edward M. Feasel, president and professor of economics at the Soka University of America, told Newsweek: “If President Trump carries through on his promise of higher tariffs across the board, and even higher with China, there will definitely be an impact on exports and GDP [gross domestic product] in the economies of our allies and others.”

He added: “They are much more reliant on exports as a source of demand than the U.S. is. Other G7 countries’ exports to GDP ratio are above 30 percent, while the U.S. is around 11 percent.

“In general, people forget exports are a source of demand for countries around the world and have helped generate economic growth and prosperity throughout modern history.”

Some scenarios show that Europe could suffer more than China. One model published by The Financial Times and Allianz Trade shows that Europe would be the worst affected in a “contained trade war” where the U.S. hikes tariffs on China to 25 percent on half of noncritical U.S. imports, and to 5 percent for the rest of the world, excluding Canada and Mexico.

In this scenario, European nations would be forecast to lose a combined total of $38.6 billion in 2025 and 2026, compared to Chinese losses of $34.2 billion.

In the event of a “fully-fledged trade war” scenario, with 60 percent tariffs on Chinese goods and 10 percent on all other nations, the model suggests China would lose an estimated total of $125.3 billion in 2025 and 2026, while Europe would lose $124.8 billion.

Newsweek has contacted Trump’s team via email for comment.

Patrick Dine, chief executive of consulting firm PSD Global, told Newsweek: “The main immediate impact related to goods and services will be on the targets of tariffs such as China and overall the countries who import most to the USA. This includes places like Germany for their non-US manufactured cars. BMW makes a lot of cars in South Carolina, for example, but the tariffs may affect their parts.

“The main ‘losers’ will be the biggest importers, so China and much of Asia. Canada and Mexico will be a little more immune due to the free trade agreement, but they will also feel the impact.”

The U.S. is the second-largest goods importer and the No. 1 services importer in the world.

In 2022, the U.S. imported goods worth a total of $3.2 trillion and services worth $680.3 billion, according to the Office of the United States Trade Representative.

That same year, the top five suppliers of U.S. goods imports were China ($536.3 billion), Mexico ($454.8 billion), Canada ($436.6 billion), Japan ($148.1 billion) and Germany ($146.6 billion). U.S. goods imports from the 27 member states of the European Union combined were $553.3 billion.

The U.S. gets the most services from the United Kingdom, accounting for 10.4 percent of total U.S. service imports in 2022 ($70.8 billion). U.S. service imports from the 27 member states of the European Union combined were $166.7 billion.

Most of the U.S. imports from China are machinery and mechanical appliances (47.7 percent), miscellaneous manufactured items (13.5 percent) and chemicals, plastics, rubber and leather (10.5 percent), according to the U.S. Office of Technology Evaluation’s 2021 report.

The majority of goods imported into the U.S. from the European Union are made up of medicinal and pharmaceutical products, followed by motorcars and motor vehicles and medicaments, according to Eurostat’s 2023 report.

But despite the projected losses for China and Europe, Bista still believes that the American people would suffer most from the tariffs.

“Tariffs, in general, imply higher prices for imports of input (such as steel and aluminum, among others) for US producers, which would ultimately be passed on to the US consumers,” he said. “This higher cost can also result in lower production, which in turn can result in rising unemployment.”

He added: “The threat of retaliation from affected countries can result in increased uncertainty, which would affect the stock market and raise volatility in the market.”

Feasel argued that an “optimal tariff” rate could exist, which is not necessarily zero percent.

“The dislocation of U.S. workers due to increasing trade and globalization has been a reality and has left many Americans disillusioned with US promotion of free trade. The backlash has been real and there have been political consequences,” he said.

Newsweek has broken down Trump’s proposed tariffs for his second term in comparison to his first here.