1. Tariffs and World Trade
2025 was a year of big changes in tariffs (taxes on imported goods). The United States raised tariffs on most trading partners, which led to trade talks and some temporary truces.
US 'reciprocal' tariffs
- On 2 April 2025 the US government announced 'reciprocal' tariffs on imports from most countries. It called the day 'Liberation Day'.
- A baseline tariff of 10% applied to most countries, with higher rates for many.
- On 9 April 2025 the higher country-specific rates were paused for 90 days to allow negotiations; the 10% baseline stayed.
- In August 2025 new country rates took effect. For India the total reached 50% from 27 August 2025 (see Module 2).
US–China trade
- In April 2025 the US and China raised tariffs on each other's goods to very high levels.
- After talks in Geneva, Switzerland, the two sides announced on 12 May 2025 that they would cut these extra tariffs sharply for 90 days.
- The truce was later extended while talks continued.
- These high tariffs between the world's two largest economies affected global supply chains and markets during 2025.
Companies and markets
- On 29 October 2025 Nvidia became the first company in the world to reach a stock market value of 5 trillion US dollars, driven by demand for AI chips.
- Many countries responded to US tariffs by signing new trade agreements with other partners. India's agreements with the UK, EFTA, Oman and New Zealand are examples.
- The WTO Agreement on Fisheries Subsidies came into force on 15 September 2025, showing that multilateral trade rules still moved forward (see Module 3).
Quick facts
- Liberation Day
- 2 April 2025: US reciprocal tariffs announced
- Baseline tariff
- 10% on most countries
- 90-day pause
- Announced 9 April 2025
- US–China Geneva deal
- 12 May 2025: tariffs cut for 90 days
- Nvidia
- First company worth 5 trillion USD (29 Oct 2025)
💡 Keep the order of dates clear: 2 April (announcement), 9 April (pause), 12 May (US–China Geneva deal), 27 August (50% on India).
📝 5-question quiz on this lesson: enrol free to take it and track your score.
