Tariffs, tensions, truces: From 'Liberation Day' shock to courtroom knockdown

The Spark Ignites: Early Tariffs and Rising Tensions

Back in early 2025, as Donald Trump settled into his second term, the stage was set for a fierce economic showdown with China. On February 4, he signed an executive order slapping a 10% tariff on imported goods from China, signaling a bold move to protect American industries. This was just the beginning. Days later, on February 5, Trump tweaked the order to allow de minimis exemptions for small packages until better systems could handle the revenue collection. By February 10, steel imports faced ad valorem tariffs, with aluminum jumping from 10% to 25%, as Trump pointed to surging Chinese steel exports displacing global production.

Tensions kept building. On February 27, a memorandum directed the Committee on Foreign Investment in the United States to block Chinese-linked investors from key sectors like technology, infrastructure, healthcare, and energy. Then, on March 3, tariffs on Chinese goods doubled to 20%. These steps echoed Trump's first-term playbook from 2018, when he hit solar panels, washing machines, steel, and aluminum with duties, drawing sharp criticism even from allies. China wasted no time retaliating, mirroring U.S. moves with tariffs on American agricultural products like soybeans, pork, and corn. The back-and-forth was underway, rattling markets and supply chains worldwide.

Liberation Day Shock and Courtroom Escalations

April 2 marked a pivotal moment with Trump's "Liberation Day" announcement. He unveiled universal tariffs, piling an extra 34% on Chinese goods atop the existing 20%, pushing the total to a staggering 54%. He also axed the de minimis exemption for packages from China and Hong Kong, claiming the processing systems were finally ready. This shocked global markets, evoking memories of 2018's $50 billion tariff salvo targeting tech theft allegations. Retaliation intensified: by April 9, China hit U.S. goods with 84% tariffs, prompting Trump to counter with 125%, later clarified as 145%. China upped theirs to 125% on April 11. Legal battles erupted too, with courtroom challenges questioning the emergency powers invoked under the International Emergency Economic Powers Act.

As spring turned to summer, the war raged on. May saw modifications to reciprocal tariffs dropping from 125% to 34% amid a brief trade deal, but by August, extensions kept pressures high. October brought Trump's threat of another 100% hike in response to China's rare earth export controls. Echoes of first-term breakdowns, like the 2019 G20 truce followed by threats on $325 billion in goods, haunted negotiators. "OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA," Trump posted on Truth Social on June 11, hinting at a potential truce on critical minerals in exchange for student visas.

The trade war has reshaped global supply chains, forcing companies to rethink sourcing and invest billions in diversification, but consumers bear the brunt through higher prices on everything from electronics to apparel.

Truces, Threats, and the Path Forward

Throughout 2025, truces flickered like mirages. A May 12 executive order adjusted tariffs post-deal, reducing reciprocal rates temporarily. Yet, by November threats loomed large. This mirrored the Phase One agreement teases from Trump's first term, where deadlines extended amid optimism, only for escalations to follow. Steel and aluminum duties from 2018 persisted, with China hitting back on U.S. farm exports, hurting Midwest farmers. Broader impacts rippled: higher costs for U.S. manufacturers, disrupted tech flows, and strained alliances as tariffs spilled over to Canada and Mexico.

The trade war's legacy is one of unpredictability. From first-term salvos worth hundreds of billions to second-term "reciprocal" hikes under IEEPA, Trump's strategy aimed to force concessions on intellectual property, subsidies, and market access. Critics argued it burdened American families more than Beijing, while supporters hailed it as tough leverage. As of late 2025, no full resolution emerged, with ongoing talks blending hope and hardball.

In summary, Trump's trade war evolved from initial 10% tariffs in February 2025 to the dramatic 54% "Liberation Day" peak, fierce retaliations topping 145%, brief truces on rare earths, and persistent legal tussles, continuing a volatile saga rooted in 2018's first clashes.