REVEALED: The 10 countries that will be worst hit by Trump's tariffs as shock graph hides surprising twist for Britain
Are Trump’s tariffs a threat to the economy or a master negotiating tactic? Experts debate
GB News
Donald Trump announced a flurry of executive orders on his first day in office, but for now, at least, he has held off slapping universal tariffs on all imports.
Financial markets breathed a sigh of relief, but he did tell reporters in the White House Oval Office that he's considering introducing a 25 per cent tariff on all products imported into the US from Mexico and Canada as soon as February 1.
Make no mistake: economic pain is coming down the pike as Trump threatens a trade war with countries that run large deficits with Uncle Sam.
The deficit-to-surplus ratio is not the only determining factor - geopolitics will play a role in who will be hit hardest too - but generally, Trump subscribes to the mercantilist mindset of might is right when it comes to international trade, so he will look to maximise exports and minimise imports to shrink America’s trade deficit.
GB News has ranked from highest to lowest in the countries that run the largest trade deficits with America and will therefore be slapped with the most punitive tariffs.
Who will be hit the hardest?
China, Mexico and Vietnam top the list, running trade deficits of around $300billion, $156billion and $109billion respectively.
Trump has pledged to impose an additional 10 per cent tariff on all imports from China, adding to the already existing tariffs.
This makes the total tariff on Chinese goods potentially as high as 60 per cent if all proposed tariffs are implemented.
The economic impact could be substantial, with previous studies indicating significant job losses and GDP reduction in China in response to similar tariff impositions.
The Chinese government has responded by asserting that no one wins in a trade war, hinting at potential retaliatory measures.
Donald Trump is expected to slap tariffs on its trading partners, with China, Mexico and Vietnam worst hit
Getty Images/ChatGPT
As Mexico's economy is heavily integrated with that of the US, with approximately 83 per cent of its exports going across the border, the proposed 25 per cent tariff on all Mexican goods will significantly impact this trade relationship.
Analysts predict tariffs could plunge Mexico into a recession, depreciate its currency and drive up inflation.
Vietnam, which has one of the largest (and rising) trade surpluses with the US, is also exposed.
The US trade deficit with Vietnam reached $102billion in the first ten months of 2024 alone, an almost a 20 per cent increase on the previous year.
Vietnam has capitalised on spiralling US-China trade tensions by becoming a manufacturing hub for companies leaving China. However, this could backfire if Trump imposes tariffs.
Canada also makes the top ten, with Trump signalling plans to impose a 25 per cent tariff on its neighbour as soon as February 1.
Outgoing Prime Minister Justin Trudeau has emphasised Canada's readiness to support American economic prosperity but cautioned against the imposition of tariffs, asserting Ottawa's intent to retaliate if necessary.
Trudeau has alluded to the possible implementation of dollar-for-dollar matching tariffs in response to new US duties.
In order of highest to lowest, other countries running the largest trade deficits with America include:
- Germany
- Japan
- Ireland
- South Korea
- Taiwan
- India
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Trudeau has alluded to the possible implementation of dollar-for-dollar matching tariffs in response to new US duties
REUTERSWhich countries will be shielded from the worst impact?
Netherlands, Hong Kong, and UAE run the largest trade surpluses with Uncle Sam, with surpluses of around $42billion, 23billion and 18billion respectively.
Trump will be less inclined to slap punitive tariffs on these countries as it could hurt American industries that benefit from these surpluses, such as aerospace, agriculture, and technology.
The UK will also be shielded from the worst as runs relatively large surplus with America.
In 2023, the UK had a trade surplus of £71.4billion with the US in goods and services, which increased to £72.1billion in the 12 months ending June 2024.
However, with trade worth over £300billion flowing across the Atlantic every year, Trump's mooted plan to slap universal tariffs of 10-20 per cent on all US imports would still have a seismic impact on the UK.
Everything from Scotch whisky, automotive products, and pharmaceuticals would face higher costs.
Analysts from various think tanks, like the National Institute of Economic and Social Research (NIESR), have estimated that Trump's tariffs could halve UK economic growth, reducing it from an already low projected 1.2 per cent to about 0.4 per cent in the year following implementation.
This is due to both increased costs for UK exporters and potential retaliatory measures from other countries.
The imposition of tariffs would likely increase inflation by pushing up the cost of imports, impacting consumer prices across various sectors. The Bank of England might then consider raising interest rates, which could further slow economic activity
This would put further pressure on Rachel Reeves, who is already struggling to tame rising borrowing costs and reverse sluggish growth.
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