Who loses the most from Trump’s tariffs? Who wins?
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The biggest determinant of where US President Donald Trump's trade wars go next may be what happens to the US economy and in financial markets.
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Washington – President Donald Trump’s bid to rewrite the global order via a raft of new US tariffs is likely to leave the world economy smaller than it would have been otherwise and inject new tensions into America’s relationships with allies and rivals alike. There are even emerging signs of damage from the levies to the US economy.
That is, of course, not how Mr Trump and his aides see it.
They point to tariff revenue as a windfall that will offset the fiscal cost of tax cuts extended by Congress in June, and to new investment commitments by both companies and countries that they say will eventually yield American jobs.
With much of the rest of the world, including the European Union and Japan, agreeing to preliminary deals and not retaliating against higher US tariffs, the Trump administration is expressing confidence about its strategy.
The higher rates for almost all US trading partners that took effect just after midnight in New York on Aug 7 mean the world’s largest economy has raised tariffs to levels it has not seen since the Smoot-Hawley law of 1930 imposed duties that deepened and prolonged the Great Depression.
Taken together, Mr Trump’s actions, Bloomberg Economics estimates, will push the average US tariff rate to 15.2 per cent, well above the 2.3 per cent in 2024.
That will leave global gross domestic product (GDP) US$2 trillion (S$2.6 trillion) smaller than it would have otherwise been by the end of 2027, Bloomberg Economics calculates.
A truce in the US trade war with China has the US imposing 30 per cent tariffs on Chinese goods.
Imports from Britain and Singapore are among the least affected
Goods from Switzerland face a more punishing 39 per cent, while those from India – singled out by Mr Trump for its purchases of Russian oil – face an additional 25 per cent duty that, if it goes into effect as threatened on Aug 27, would take the total rate to 50 per cent and make most of the country’s exports to its biggest overseas customer economically tenuous. Brazilian products also face duties as high as 50 per cent.
But the story is more complicated than that. Even as he has erected a historic tariff wall, the US leader has created some duty-free doors through it.
Going into Aug 7, the Trump administration had exempted more than US$1 trillion in goods from the new levies – or more than a third of US imports in 2024, a Bloomberg News analysis found.
That number may grow even larger as an opaque system under which some big US companies and industries enjoy tariff relief takes effect.
Major questions remain surrounding additional levies and the preliminary deals he has announced with several US trading partners.
But there is little question that Mr Trump’s tariff regime will leave few winners and plenty of losers.
Here is the current state of play.
What new tariffs are in effect in the US?
Mr Trump has targeted shipments from all the nations America does business with and introduced separate levies on imports for specific industries. The duties he has put into effect include:
A cumulative surtax of at least 30 per cent on many products from China, with some significant exceptions. That is down from the 145 per cent level it touched briefly in April amid a tit-for-tat escalation. A detente the two countries agreed to in mid-May is due to expire on Aug 12.
A minimum 10 per cent baseline tariff on other imports, with some exceptions. Goods from countries that have the largest trade surpluses with the US face what the administration calls “reciprocal tariffs” ranging from 10 per cent to 41 per cent, most of which kicked in on Aug 7.
Goods from Canada and Mexico that are not covered by the US-Mexico-Canada free-trade agreement, or USMCA, face tariffs of 35 per cent and 25 per cent, respectively. Imports of Canadian energy are taxed at 10 per cent.
Imports from the EU, Japan and South Korea face 15 per cent duties under the terms of framework deals announced by Mr Trump, though in the case of the EU there are carve-outs for aircraft and aircraft parts as well as certain generic drugs and chemicals.
A 40 per cent additional tariff on goods deemed to be “trans-shipped”, meaning they are rerouted through another country to evade higher duties. The Trump administration has not yet specified the so-called rules of origin it will use to define trans-shipped goods.
Tariffs on industrial metals: a 50 per cent duty on imports of steel and aluminium products and a 50 per cent levy on imports of semi-finished copper products, such as pipes and wires, and copper derivative products like electrical components.
A 25 per cent tax on imports of fully assembled cars, with some exceptions for cars coming from Canada and Mexico. A 25 per cent tariff on imports of vehicle parts is being phased in over a two-year period, although components that comply with the USMCA are exempt. Auto imports from Japan, South Korea and the EU face a lower 15 per cent duty as part of their trade deals.
The “de minimis” tariff exemption, which allowed small packages with a retail value no higher than US$800 to enter the US duty-free, will come to an end for all trading partners as at Aug 29. The loophole had already been closed for such low-value parcels coming from mainland China and Hong Kong.
Who are the biggest losers from Trump’s tariffs?
India is potentially among the most affected. The 25 per cent “reciprocal” tariff rate for its imports to the US is higher than the numbers Mr Trump says he has agreed on with some South-east Asian countries that are natural competitors with India to displace China in US supply chains, though negotiations are said to continue.
Goods from Indonesia are taxed at 19 per cent and those from Vietnam at 20 per cent. Plus, Mr Trump is threatening the additional levy to punish India for importing Russian oil. That is set to begin in late August. If that happens, Indian exports to the US could drop by 60 per cent, imposing a 0.9 per cent drag on India’s GDP, Bloomberg Economics estimates.
Switzerland is in a similar position to India. Mr Trump has imposed a 39 per cent tariff on US imports from the Alpine nation, which include watches and chocolate, though key goods such as pharmaceuticals and gold remain exempt. Products exported to the US from Switzerland’s EU neighbours face a far lower baseline duty of 15 per cent.
Is anyone winning from Trump’s tariffs?
The big winners so far are the companies that are benefiting from tariff exclusions. The April 2 executive order in which Mr Trump first launched his country-based tariffs included a 37-page annex with more than 1,000 tariff codes for excluded products. Some of those are likely to be temporary, but even that can be a meaningful win for companies. Plus, some major corporations, such as Apple, have managed to negotiate longer exclusions.
On April 11, Mr Trump added smartphones, laptops and other consumer technology products to the exclusion list. That means iPhones and other Apple products have avoided the new duties. On Aug 6, Apple chief executive Tim Cook joined the President in the Oval Office to announce that the company was increasing its investment in the US over the next four years to US$600 billion. The payoff for that: an exclusion not only from the existing new tariffs, but also forthcoming ones on semiconductors and products that contain them.
Along with Apple, the big beneficiaries include South Korea’s Samsung Electronics. The tech sector avoided more than US$7 billion in tariffs in just those two months, according to official trade data.
Is China a winner or a loser?
The ultimate winner may end up being China. While Chinese exports to the US have slumped, there are signs that the world’s largest exporter is finding other markets for its goods. More broadly, there is a risk that a belligerent US ends up driving other nations towards China by convincing them America’s rival is a more reliable economic partner.
As Mr Trump raises tariff barriers around the US, he also risks turning it into a protectionist island in the global economy and opening up new opportunities for increasingly competitive Chinese products.
While designed to boost domestic US manufacturing, his policies ultimately will mean higher priced inputs for US factories. That would make them less, rather than more, competitive in the world.
That is all as he also alienates America’s overseas customers – whether they are in Canada, where boycotts of US goods have already taken hold, or India, where politicians are aggrieved about Mr Trump trying to force the country to stop buying cheap Russian oil.
What does all this mean for the US economy?
It can be difficult to sort through the economic effects of tariffs.
In theory, they can stimulate employment in protected industries by attracting investment as companies try to get around tariffs by moving factories to the taxing country.
At the same time, jobs in other areas are often lost, as companies face higher costs for imported inputs or domestic alternatives, if they exist.
Economists say there is also a significant effect from the uncertainty surrounding the tariff roll-out and how long the levies will last.
Because of the foggy outlook, companies and consumers often hold off on making big decisions, whether it is to invest in new factories or buy new kitchen appliances.
More than half of all American imports are components and raw materials used to make things in the US.
Mr Trump’s goal is to spur a revival of American industry. But while companies have made some significant announcements about future investments, there are few signs that are translating into employment. Since he unveiled his new tariffs in April, the US has actually lost 37,000 manufacturing jobs.
The scale of the tariffs has sparked fears inflation will rise and the US economy will slow, potentially triggering a recession.
The growth outlook has improved somewhat since the initial announcement of tariffs sparked financial market turmoil in April. The tariff de-escalation with China
There are already signs the duties are starting to bite. US GDP data for the second quarter of 2025 showed investment slowing. The July jobs report pointed to an anaemic labour market.
A 2018 model from the Federal Reserve provides a useful way to calculate the effects. It suggests that each percentage point hike in the tariff rate lowers GDP by 0.14 per cent and pushes up prices by 0.09 per cent.
Based on that model, Bloomberg Economics estimates that the Aug 7 increase in tariffs could induce a 1.8 per cent drop in US GDP and a 1.1 per cent increase in inflation, in a shock that will play out over two to three years.
Who’s paying these tariffs?
Mr Trump has hailed the surge in tariff revenues to around US$30 billion a month as a windfall for the US. But tariffs are taxes and are by law paid by the US importer, or an intermediary acting on the importer’s behalf. Studies have shown the cost of new import taxes is often passed on to consumers in the form of higher prices.
Importers can also renegotiate their contracts with foreign suppliers, meaning they can bear some of the burden as well.
The blow to companies has already been meaningful. General Motors reported a US$1.1 billion hit to its recent quarterly profits as a result of tariffs. Ford Motor warned of a US$2 billion wallop in 2025. Toyota Motor said its bottom line could see annual tariff damage nearing US$10 billion.
The Trump administration argues that exporters abroad will eventually bear the true burden of tariffs as they lower their prices and currencies adjust. But there are not many signs of that happening so far; economists point to import price data that has not shown any major movements.
What comes next?
Mr Trump on Aug 6 pledged to roll out new duties on pharmaceuticals and semiconductors in the following week or so. He has flagged eventual tariffs of as high as 250 per cent on imported drugs and 100 per cent on semiconductors, though he has also signalled there will be carve-outs.
If the deal with the EU is anything to go by, an exception for generic drugs may be coming. Mr Trump also has said that Apple and other companies that promise to do more manufacturing in the US will be exempted from the chip duties.
Beyond that, he has ordered up investigations into imports of critical minerals, drones, commercial aircraft, trucks and lumber, among other things. Each of those probes could yield yet more duties.
There are also potentially more deals to come.
Switzerland may not have had any luck yet in getting its 39 per cent tariff reduced, but it may someday. Likewise, Mr Trump’s threat of a 25 per cent surcharge on India over its purchases of Russian oil may accelerate negotiations towards a deal that both sides had indicated beforehand was close.
The biggest determinant of where his trade wars go next may be what happens to the US economy and in financial markets. Wall Street strategists have begun warning of a looming correction in US equities that have recently hit record highs.
Mr Trump’s project to remake the global economy is proceeding apace for now. But as its real consequences become clear, even he may have to recalculate. BLOOMBERG
