Tariff Versus Peace: The U.S. Launches a New Trade Blockade

On July 31, 2025, Donald Trump signed a new executive order dramatically raising tariffs on imports from 69 countries. The document, published on the White House website and extensively covered by Politico, Reuters, and The Guardian, describes the US trade deficit as an "unusual and extraordinary threat to national security." It was under this legal justification that the IEEPA mechanism was activated—an instrument previously used predominantly for imposing sanctions against hostile states.

Now the new regime affects not only China and Pakistan, but also allies: Canada, Switzerland, India, Taiwan, South Korea, and Brazil. Depending on the country, new rates range from 10% to 50%. The tariff on Swiss exports reached 39%, on Canadian—35%, on Indian—25%, on Taiwanese—20% (Reuters, Forbes, The Guardian).

What is particularly noteworthy is that the tariff increase occurred in parallel with the completion of trade agreements with several other countries. Just one week after the US concluded deals with the EU, Britain, Japan, Indonesia, and the Philippines, a new round of tariff pressure began on those who refused Washington's terms.

Thus, America has for the first time formalized the principle of "sign and get preferences; resist and pay." The new order is not merely an economic document, but a diplomatic ultimatum rewriting the principles of global trade.

Chronology of the turnaround: how we got here

In spring 2025, US trade policy entered a new phase. On April 2, the first order was signed introducing a baseline tariff of 10% on all imports from more than 60 countries, unofficially dubbed "Liberation Day Tariffs" by the American press. As the White House explained, the goal was to "restore fairness" amid years of trade deficits and "systematic exploitation" of the American market.

Soon after, the administration began a series of negotiations with key economic partners. Washington sent similar letters—tariff ultimatums of sorts—to dozens of countries. Each was offered an individual agreement ensuring access to the American market on new terms; otherwise, the baseline 10% rate would automatically take effect in May. Thus began the first stage of the strategy: "trade through consent."

Over the following months, as shown in analytical materials by Covalent Bond, this policy transformed into a system of bilateral preferential deals. First, Japan, Britain, and Indonesia reached agreements, then the Philippines and the European Union joined them. Each deal included its own conditions, but the principle remained the same: countries reduced tariffs on American goods, recognized US standards (including FDA, digital, environmental), opened access to their domestic markets—and in exchange received protection from increased American tariffs.

On July 31, exactly four months after the first order, a second reinforcing one was signed. It formalized punishment for those who did not agree to Washington's terms. Tariffs were raised to record levels for the past 40 years, and the list of target countries was expanded to 69. This step marked the final transition from negotiation diplomacy to coercive economics.

Who signed, who's under threat

By the time the new tariff order was announced, the US had already completed key bilateral deals with several countries that can now be conditionally called "signatories." They avoided new duties by yielding to Washington on a whole range of areas—from trade standards to purchases of American products.

📜 Countries that concluded deals with the US (and main conditions)

These agreements were signed individually, bypassing the WTO, and de facto created a new tariff architecture based not on universality but on loyalty. Each country received unique conditions—and simultaneously accepted harsh American requirements as standard.

Who's under attack (countries receiving new tariffs)

The list of countries that did not conclude agreements and became targets of the July 31 order was published in The Guardian and Economic Times. Among the countries:

• 🇹🇼 Taiwan — 20%

• 🇮🇳 India — 25%

•  🇨🇭 Switzerland — 39%

•  🇨🇦 Canada — 35%

•  🇧🇷 Brazil — 50%

•  🇵🇰 Pakistan — 19%

•  🇰🇷 South Korea — 17%

•  🇲🇽 Mexico — under threat, negotiations continue

•  🇨🇳 China — main non-signatory, status unchanged

The reasons for refusing to sign vary—from strategic considerations to domestic political pressure. However, the formula is one: tariff as punishment for disagreeing with new US trade rules.

China as the main target

None of the countries hit by new American tariffs occupies such a key position as China. Despite numerous negotiations, participation in bilateral meetings and behind-the-scenes consultations, Beijing remains the largest economic partner that has not concluded a deal with Washington.

As detailed in the Covalent Bond article "Discipline through the market", the US is conducting a policy of systematic pressure on the People's Republic of China through tariff and technological coercion. This is no longer just about trade: it's about reconfiguring global production architecture. Supplies of rare earth elements, semiconductor chains, exports of high-tech products—everything becomes the object of reshaping.

The latest attempt to prevent escalation was the London meeting, unofficially called the "London Round." It discussed conditions for US access to rare earth metals and the future fate of Chinese exports in strategic sectors. However, no agreement was reached.

Beijing views the tariff regime as unilateral imposition of standards, refusing to recognize the legal and economic legitimacy of a scheme where one country provides preferences only based on political loyalty. In response, the US is intensifying pressure—not only through duties but also through export licenses, restrictions on American technology supplies, sanctions against Chinese companies.

All this turns the PRC into the main point of geoeconomic tension. And at the same time—into the last fortress, whose fall could mean the final formalization of American trade doctrine as a global norm.

Deal politics: how the US uses tariffs as leverage

Unlike previous multilateral agreements of the WTO era, the new American trade architecture is built on individual, asymmetric agreements. Each is a deal-obligation where tariffs become not an economic mechanism but an instrument of political pressure.

According to Covalent Bond (article "Special conditions"), the US applied its own list of requirements and bonuses to each country:

• Japan not only avoided duties—it committed to investing $550 billion in the US economy, increasing purchases of American military equipment, and recognizing US standards in aviation, digital environment, and agriculture. The deal became a crucial element of strategic partnership while simultaneously causing criticism from Japanese automakers.

   

• Indonesia agreed to remove 99% of its tariffs on American goods, recognize FDA standards and commitments on free digital flows. In return, Indonesian exports received a 19% rate instead of the threatened 32%, and the US gained guaranteed access to critically important minerals.

   

• The Philippines signed an agreement including liberalization of access for American platforms and digital products, coordination of labor standards, and simplification of logistical barriers for American imports. The signed package was the first to fix obligations on regulating digital content according to American standards.

   

• Britain, taking advantage of post-Brexit flexibility, concluded an agreement providing preferences in services and security. Britain refused to participate in the European line of defense against tariff pressure and received partial immunity from new duties on conditions of expanded cooperation in defense.

  
  

•  The European Union was essentially forced into a complex compromise: formally remains under a 15% tariff but in exchange received broad exceptions for agricultural products, pharmaceuticals, and industrial equipment. The deal is formalized as a flexible package giving the US adjustment tools depending on Brussels' political behavior.

These agreements are tailored not to economics but to the diplomacy of influence. Washington uses tariffs not as a tax but as an invitation to submission. Each partner is offered a choice: either you're part of the new system—and get access, or you're outside it—and pay for it.

Reactions: geoeconomics on edge

Publication of the second tariff order caused immediate reaction in global markets. US indices opened with declines: Dow Jones lost 1.2%, S&P 500—0.9%, Nasdaq—1.4%. The largest losses were recorded by companies connected to international logistics, semiconductors, and raw materials—especially those whose supply chains are closely linked to Asia.

On the Canadian market, the S&P/TSX index dropped almost 1% immediately after news of tariff increases on Canadian exports to 35% (Reuters). European and Asian indices also reacted with declines, especially in Seoul, Taipei, and Zurich.

Political reaction was polarized. Democrats in Congress accused Trump of "creating an artificial crisis" and "undermining confidence in the international system." A statement from the Democratic House majority said that "the new wave of tariffs will lead to price increases for American consumers and worsen already recorded unemployment growth to 4.2%" (The Guardian).

Meanwhile, administration allies appeal to national security and "restoring balance." Former Trade Representative Robert Lighthizer stated that "nobody talks about fairness—until it's demanded of you."

At the level of individual countries, reactions varied from harsh criticism to accelerated consultations. India's Ministry of Commerce called the 25% tariff "disproportionate and politically motivated." Switzerland announced it would seek compensation through the WTO—despite the obvious meaninglessness of appeals within the destroyed organization. Taiwan expressed "deep regret" and noted it was reconsidering export priorities amid instability in relations with Washington.

Outcome: new trade architecture

The new US tariff regime is not an amendment to previous policy. It's a fundamental shift in global trade principles, where collective norms yield to individual contracts, and universal rules to coercion through tariffs.

The United States no longer plays the role of arbiter. They act as architect of an alternative trade world where tariffs are the language of negotiation. Those who sign agreements get access, protection, investment concessions. Those who refuse face maximum rates, technological isolation, and diplomatic pressure.

Instead of globalization—trade segmentation. Instead of the WTO—a network of bilateral pacts with rigid hierarchy. Instead of mutual concessions—the formula "you concede—we reward." This is not a trade war in the conventional sense, but a new form of geoeconomic governance where Washington combines the functions of judge, prosecutor, and executioner.

At the center of this construction is China. Its resistance and refusal to make a deal turns Beijing not simply into an object of pressure, but into the final test of the new model's effectiveness. If China signs—the architecture will be consolidated. If it holds out—a responsive phase of global resistance may begin.

But for now—the world is split. And the line of division is drawn by tariff rates.