Donald Trump’s latest round of tariffs on Mexican, Canadian and Chinese imports appears set to deepen global trade tensions, affecting everything from automotive production and retail prices to the commodities markets and digital currencies.
The new levies now extend to small packages previously exempt from such measures, covering about 44 per cent of all US imports. Here is how different sectors could be hit.
Automotive
Car makers are among the most vulnerable to the tariffs. The US plan to impose 25 per cent duties on parts and vehicles imported from Mexico and Canada—though Canada has been granted a 30-day reprieve—could add an estimated $43 billion in annual costs, according to analysts at Jefferies. That equates to roughly $2,700 more on the price of a typical American car.
European manufacturers with Mexican operations, such as Volkswagen and Stellantis, face notable exposure. Research by Stifel suggests Volkswagen could see its operating income cut by 12 per cent in 2025, with Stellantis shouldering a 40 per cent downgrade. Meanwhile, Daimler and lorry-maker Traton (part of the VW group) would also feel the impact, as about two-thirds of their vehicles are assembled south of the US border. In contrast, Volvo, which does not yet operate an assembly plant in Mexico, is less exposed.
Beverages
Drinks producers, particularly those with large US sales, are bracing themselves. About a third of Diageo’s $20.3 billion in annual global revenue comes from North America, with brands such as Crown Royal whisky and Don Julio tequila imported from Mexico and Canada. Although some respite may be found in favourable currency movements and falling agave costs, analysts at Goodbody estimate that tariffs could still knock $500 million to $600 million off Diageo’s bottom line.
Campari, the Italian spirits firm, has similar worries: around a third of its US revenue stems from products imported from Canada and Mexico, making it another clear target for the new duties.
Retail
Higher import costs risk fuelling inflation and weakening consumer confidence in the United States, which could spill over into European and UK retail sales. According to Harvir Dhillon, an economist at the British Retail Consortium, a global rise in prices from trade barriers “could be felt globally,” dampening spending power.
Clothing chains such as H&M, Primark and JD Sports may feel the fallout if a dip in US confidence spreads, although grocers on this side of the Atlantic are seen as less exposed. Meanwhile, the UK Fashion and Textile Association warns that duties affecting goods containing Chinese materials—whether they arrive directly from China or via another country—could reverberate across the global supply chain.
Paper & packaging
Europe’s pulp and packaging industries may initially benefit, at least relative to their Canadian counterparts. The US still relies heavily on Canadian pulp and lumber, so tariffs could push prices higher for American consumers on essentials such as tissue and toilet paper, and possibly force the shutdown of higher-cost Canadian mills. That might open the door for some EU producers—such as Sweden’s SCA—to snap up market share in the US.
However, any subsequent US tariffs on EU goods would reverse those gains. In addition, a slowdown in Chinese demand for pulp, or an overall decline in global trade, could also weigh on the sector. A stronger dollar does give some advantage to European exporters, but this could be short-lived if trade tensions intensify.
Cryptocurrencies
Digital currencies have been caught in the global sell-off, with more than $500 billion wiped off the crypto market’s value. Bitcoin, the market’s top coin, plunged to a three-week low of $91,442 before rebounding to around $101,240. Ethereum remains down, trading around $2,706.
Crypto markets trade 24/7, making them one of the first to reflect negative sentiment when Trump’s latest tariffs took effect. While hopes for a crypto rally initially rose after Trump’s election—given several pro-crypto figures in his administration—analysts say the market’s rapid descent underscores investor fears over ballooning risk.
Commodities
Shares in the largest diversified miners tumbled on concerns that a trade war will hamper global growth and depress metal demand. BHP, Rio Tinto, Anglo American and Glencore all ended lower, reflecting a shift away from riskier assets.
Gold, traditionally a hedge in times of turmoil, has had a volatile run: it soared to a record $2,817.23 an ounce on Friday amid tariff worries, dipped on Monday as the dollar strengthened, but then recovered to a fresh high of $2,833.90 by the evening. Oil benchmarks, meanwhile, remain caught between concerns over a global economic slowdown and potential disruption to supply. Brent crude stood at $75.59 a barrel and West Texas Intermediate at $72.58, marking minor gains tempered by trade war anxiety.
The immediate pause on Canada’s tariffs—and a temporary deal with Mexico—offered fleeting hope that cooler heads might prevail. However, President Trump’s push against Chinese imports, alongside the threatened duties on a broad range of Mexican and Canadian goods, suggests more volatility is likely. Businesses worldwide will be forced to grapple with rising costs, re-routed supply chains, and shifting consumer demand as this high-stakes trade game plays out.
Read more:
Global supply chains brace for shock as Trump’s tariffs bite from cars to crypto