Trump Intensifies Tariff War on Critical Industries

BREAKING NEWS: US Commerce Department Launches Sweeping Trade Investigations, Targeting Key Industries

The U.S. Department of commerce has initiated a series of important trade investigations, signaling a potential shift in global trade dynamics. Investigations have been launched into drones, polysilicon (a crucial component for solar panels), and medium and heavy-duty trucks used in maritime transport. These probes lay the groundwork for possible future tariff impositions, though any such measures are anticipated to be implemented at a later stage.

In parallel, the European Union (EU) is actively engaged in negotiations with the U.S. governance, seeking exemptions from potential tariffs on commercial airplanes and reaction engines.The Commerce Department’s examination into these aircraft components, which commenced in May, remains ongoing.

Evergreen Insights:

These investigations highlight the U.S. government’s ongoing efforts to address perceived trade imbalances and protect domestic industries. The focus on polysilicon underscores the strategic importance of renewable energy supply chains and the potential for trade policies to influence their progress. Similarly, the scrutiny of drones and maritime transport equipment reflects broader concerns about national security, intellectual property, and fair competition in increasingly vital sectors. The EU’s proactive engagement demonstrates the complex diplomatic and economic maneuvering involved in managing international trade relationships, particularly when significant industries are at stake. As global supply chains become more interconnected and politicized, understanding the motivations behind these trade actions and their potential ripple effects is crucial for businesses and policymakers alike.

How might the tariffs on critical minerals affect the US technology sector’s ability to innovate and compete globally?

New Tariffs and Their Immediate Impact

As of July 20,2025,former President Donald Trump,now in his second term,has significantly escalated existing trade tensions with a new round of tariffs targeting critical industries. Thes aren’t simply continuations of previous policies; the scope and severity represent a substantial shift in the US trade strategy. The focus is heavily on imports from China,Mexico,and increasingly,the European Union. Key sectors affected include:

Steel and Aluminum: Tariffs have been raised to 30% on steel and aluminum imports, citing national security concerns and a desire to bolster domestic production. This builds upon earlier tariff implementations.

Automotive: A 25% tariff now applies to all imported vehicles and auto parts, impacting manufacturers globally.

Pharmaceuticals: A controversial 15% tariff on pharmaceutical imports aims to incentivize domestic drug manufacturing, but raises concerns about healthcare costs.

Critical Minerals: Tariffs on rare earth minerals and other critical materials essential for technology and defence have been implemented, aiming to reduce reliance on foreign suppliers.

Agricultural Products: Retaliatory tariffs from affected nations are already impacting US agricultural exports, particularly soybeans, corn, and pork.

These new tariffs are being justified by the governance as necessary to protect American jobs, reduce the trade deficit, and strengthen national security. However, economists are widely predicting negative consequences for consumers and businesses.

Sector-Specific Analysis: Who’s Hit Hardest?

The impact of these tariffs isn’t uniform. some industries are facing an existential threat, while others are bracing for significant disruption.

Automotive Industry Fallout

the 25% auto tariff is arguably the most impactful.

Foreign Automakers: Companies like Toyota, BMW, and Volkswagen, which rely heavily on exports to the US market, are facing increased costs and potential production cuts. Some are considering shifting production to the US, but this requires substantial investment and time.

US Auto Parts Suppliers: While intended to benefit domestic suppliers, the tariffs on imported parts are increasing costs for US manufacturers who rely on global supply chains.

Consumers: Higher vehicle prices are already being passed on to consumers, impacting affordability and potentially slowing down sales.

Pharmaceutical Price Increases & Supply Chain Concerns

The 15% tariff on pharmaceuticals is sparking outrage from healthcare providers and patient advocacy groups.

Drug Costs: Expect to see increases in the price of both brand-name and generic drugs, potentially impacting access to essential medications.

Supply Chain Disruptions: The pharmaceutical supply chain is complex and global. Tariffs could lead to shortages of certain drugs if manufacturers are unable to quickly adjust.

Innovation concerns: Reduced profits for pharmaceutical companies could stifle investment in research and development of new drugs.

Steel, Aluminum & Infrastructure Projects

the increased tariffs on steel and aluminum, while aimed at boosting domestic production, are creating challenges for industries that rely on these materials.

Construction Industry: Higher steel and aluminum prices are increasing the cost of construction projects, potentially delaying or canceling infrastructure investments.

Manufacturing: Manufacturers that use steel and aluminum in their products are facing increased input costs, impacting their competitiveness.

Domestic producers: While domestic steel and aluminum producers are benefiting from increased demand, they may struggle to meet the needs of the market, leading to shortages.

Retaliation and the escalating Trade War

The imposition of these tariffs has triggered a wave of retaliatory measures from affected countries.

China: Has imposed tariffs on US agricultural products, energy products, and manufactured goods.

mexico: Has responded with tariffs on US agricultural and industrial products.

European Union: Is threatening tariffs on a range of US goods, including agricultural products, consumer goods, and industrial machinery.

This tit-for-tat escalation is creating uncertainty and disrupting global trade flows. The potential for a full-blown trade war looms large.

Impact on US Consumers: Inflation and Purchasing Power

The tariffs are contributing to rising inflation and eroding consumer purchasing power.

Higher Prices: Consumers are paying more for a wide range of goods, from cars and appliances to pharmaceuticals and food.

Reduced Spending: Higher prices are forcing consumers to cut back on discretionary spending, impacting economic growth.

Supply Chain Issues: Tariffs are exacerbating existing supply chain disruptions,leading to shortages and further price increases.

Navigating the Tariff Landscape: Strategies for Businesses

Businesses impacted by the tariffs need to develop strategies to mitigate the risks and adapt to the changing trade habitat.

1. Diversify Supply Chains: Reduce reliance on single suppliers and explore option sourcing options.
2. Negotiate with Suppliers: Work with suppliers to negotiate lower prices or share the cost of tariffs.
3. Explore Tariff Exemptions: Investigate weather your products qualify for any tariff exemptions.
4. Lobby for Policy Changes: Engage with policymakers to advocate for policies that support free trade.
5. Invest in Automation: Increase efficiency and reduce labour costs to offset the impact of higher input prices.

Historical Precedent: Lessons from Past Tariff Wars

Looking back at historical tariff wars, such as the Smoot-Hawley Tariff Act of 1930, provides valuable insights. The Smoot-Haw