Only China and Canada push back meaningfully, while others delay or avoid response amid fear of escalation.
Tariff Windfall: $64 Billion in U.S. Customs Revenue
Despite being mocked for “always chickening out,” U.S. President Donald Trump has turned the tables with his aggressive new trade policy, netting nearly $50 billion in additional tariff revenue.
Newly released U.S. Treasury data reveals customs revenue soared to $64 billion in Q2, up from $17 billion during the same period last year—a historic increase.
Limited Global Pushback: Only Two Major Retaliators
Four months after Trump implemented sweeping tariffs—including:
- A 10% global tariff floor
- 50% levies on steel and aluminum
- 25% duties on automotive imports
…only China and Canada have responded with substantial retaliatory tariffs.
Most countries have shown restraint, avoiding escalation and dampening fears of a global trade war.
Why the Silence? Fear of Further Retaliation
According to Marta Bengoa, professor at City University of New York, countries are holding back because “Trump has made it clear he’ll raise tariffs again in response to retaliation.”
Many governments, she notes, remember the bruising 2018–2019 trade war, where tit-for-tat measures ended in more pain than progress.
China and Canada: Retaliation Without Much Return
- China: Imposed tariffs up to 145% but scaled back to 30% after a Geneva truce in May. Its customs revenue saw only a 1.9% increase in May 2025.
- Canada: Announced C$155 billion in tariffs earlier this year but has since backed off. Prime Minister Mark Carney also shelved a digital services tax and chose not to double steel tariffs in response.
EU and Mexico Play the Long Game
- European Union: Has drawn up a €72 billion retaliatory package targeting U.S. goods like aircraft and bourbon, but is holding off pending a Trump-set August 1 negotiation deadline.
- EU officials are linking trade tensions to broader geopolitics, including U.S. support for Ukraine.
- Mexico: Despite being the U.S.’s largest trading partner, has opted for diplomacy. President Claudia Sheinbaum is pushing for a negotiated solution, citing economic pragmatism.
Global Business Adjusts
Major firms such as Apple, Adidas, and Mercedes-Benz have shifted their sourcing strategies or absorbed higher costs to shield U.S. consumers, softening immediate market shocks.
Echoes of the 1930s
Trump’s tariffs now represent the highest protectionist levels since the Smoot-Hawley Tariff Act of the Great Depression era. The European Commission is warning that if Trump follows through with a 30% tariff on EU exports, it could make transatlantic trade “almost impossible.”
