Understanding Tariffs: Impact on Business and the Global Economy

By Nidhi Thakkar, Audit Manager, Sherbert CPA, PC – nthakkar@sherbertcpa.com

 

The global trade landscape has shifted dramatically in recent months. Since April 2, 2025, the U.S. has implemented the most aggressive tariff regime in nearly a century, with the weighted-average tariff rate surging from 2% to over 20%. This escalation has triggered widespread market volatility and prompted swift international responses.

🌐Global Trade Development

China has retaliated with 125% tariffs on U.S. imports, while over 75 countries are actively renegotiating trade agreements. A 90-day tariff pause was announced by President Trump for 60 countries and the European Union, offering temporary relief. Simultaneously, a new 30% tariff on Chinese imports has taken effect. In response, China has reduced duties on most U.S. goods but continues to enforce export bans on critical minerals.

🗓️ 2025 Tariff Timeline: Key Events & Milestones

Date	Event
Jan 20	President Trump sworn in; signals sweeping tariff agenda
Feb 4	10% tariff imposed on all imports from China and Hong Kong
Mar 4	Tariffs raised to 20% on China; 25% on Canada and Mexico
Mar 12	25% global tariff on steel and aluminum imports implemented
Mar 26	25% tariff announced on automobiles and parts, effective April 3
Apr 2	“Liberation Day” tariffs unveiled; 10% reciprocal tariff on all goods
Apr 5–9	Tariffs expanded to 57 countries; China hit with 125% duties
Apr 9	90-day tariff pause announced for 60 countries and the EU
May 3	Deadline for auto parts tariffs; partial credits introduced
June 1	China lowers tariffs on most U.S. goods but maintains mineral bans
June 30	U.S. average tariff rate exceeds 20%, highest in nearly a century

🏢 Business Strategies Amid Tariff Uncertainty 

Tariffs are forcing companies to either absorb higher costs, raise prices, or reconfigure supply chains

• Supply Chain Resilience: Diversifying sourcing and strengthening logistics.

• Tax Efficiency: Reassessing structures to maximize tax credits and incentives.

• Pricing Adjustments: Realigning models to offset cost burdens.

• Strategic Alliances: Pursuing mergers and partnership

• Compliance Enhancements: Increasing oversight to navigate legal changes.

🌍 Country-by-Country Snapshot: Tariff Reactions & Trade Adjustments

Country/Region	Response to U.S. Tariffs	Trade Strategy Adjustments
China	Imposed 125% retaliatory tariffs on U.S. goods	Lowered some U.S. import duties; maintained mineral bans
European Union	Received 90-day tariff suspension from U.S.	Pursuing bilateral negotiations; WTO consultations ongoing
Canada	Included in U.S. tariff pause	Exploring alternate export markets; subsidies for exporters
Mexico	Under tariff pause; affected by auto and steel levies	Seeking trade pacts beyond USMCA; supply chain rebalancing
India	Lobbying for exemption; increased tariffs on select U.S. items	Expanding domestic manufacturing incentives
Brazil	Tariffs partially applied on industrial goods	Negotiating exemptions; pushing for regional trade blocs

Note: This table reflects developments as of June 30, 2025 and is subject to change.

Tariffs: Pros & Cons

Benefits: 

• Protect domestic industries and jobs.

• Strengthen national security.

• Boost government revenue.

• Offer leverage in trade negotiations.

Drawbacks: 

• Increase consumer prices and reduce affordability.

• Risk triggering trade wars.

• Suppress competition and innovation.

• Slow economic and real estate development.

 

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📊 Business Response by Market Position 

• Growth-Oriented Firms – Driving expansion and pricing optimization.

• Margin-Focused Firms – Protecting margins via loyalty programs and refined pricing.

• Cost Conscious Firms – Streamlining operations and resetting cost structures.

• Risk-Averse Firms – Rationalizing investments to weather uncertainty.

 

💼 The Sherbert Group is helping businesses navigate this turbulent environment through: 

• Financial Consulting – Strategies for tax credits and portfolio management.

• Real Estate Solutions – Incentives and financing to reduce development costs.

• Investment Advisory – Supporting firms under financial strain with lending and asset management.