By John Lau
March 6, 2025 – Trade policies don’t always make headlines, but when they do, it’s usually because they’re creating disruptions. With tariffs expanding and global trade relationships shifting, the current landscape demands a closer look. Recent developments have introduced significant uncertainties for businesses, investors, and policymakers, and I felt it was important to provide a clear and structured analysis of what’s happening.
This overview breaks down the key developments in the escalating trade conflict under Trump’s second term, commonly referred to as “Trade War 2.0”. I’ll also compare them to the 2018-2020 trade war and assess their implications for global economies and investment landscapes. My intent here is to offer a clear and professional perspective on these events, focusing on the broader economic picture, rather than specific investment recommendations or performance data.
One caveat: Given the rapid pace of developments changing daily and even hourly, it’s impossible to have the most up-to-date information at any single moment, but hopefully this analysis can provide a structured framework to navigate the unfolding landscape.
The Dawn of Trade War 2.0
Since assuming office in January 2025, President Trump has reignited trade tensions with a strategy that surpasses the scope of his first term. Unlike the 2018-2020 trade war, which primarily targeted China, this new phase involves a wider array of countries and industries. The administration has acknowledged that these policies may lead to higher consumer prices in the U.S., framing it as a necessary cost to advance national interests. Where the earlier conflict focused on specific goods like steel and Chinese exports, Trade War 2.0 introduces broader measures, including tariffs on all imports and heightened restrictions on technology transfers. This escalation has prompted rapid responses from trading partners, creating a dynamic and challenging global trade environment as we progress through 2025. To understand this shift, let us first revisit the key aspects of the initial trade war before examining the current landscape.
Flashback: Trade War 1.0 (2018-2020) in Brief
The trade war of 2018-2020 began with the U.S. imposing tariffs of 10% to 25% on approximately $370 billion of Chinese goods, citing unfair trade practices. China responded with tariffs of 5% to 10% on $75 billion of U.S. exports, affecting products such as soybeans, automobiles, and energy commodities. These duties largely translated into higher costs for American consumers. Businesses adapted by rerouting supply chains, with some production moving to countries like Vietnam and Mexico. Domestic steel producers benefited from a 25% tariff on imported metals, but U.S. exporters faced significant setbacks. For instance, China shifted its soybean purchases to Brazil, a market loss that never fully recovered, while Boeing saw orders decline in favor of Airbus. The “Phase One” agreement in January 2020 offered a temporary reprieve, with China committing to purchase an additional $200 billion in U.S. goods, though it fell short of this goal, leaving many tariffs in place through 2024. This backdrop of unresolved tensions paved the way for the more expansive approach we see today.
Major Developments in Trade War 2.0 (2025-Present)
Trump’s renewed trade agenda has introduced a series of impactful measures in 2025. One of the most notable proposals is a 10% tariff on all U.S. imports, encompassing over $2.8 trillion in goods from all trading partners—a stark contrast to the targeted duties of the past. As a first step, a 10% tariff on Chinese imports was enacted on February 4, 2025, with threats of increases up to 60% if China does not concede to U.S. demands. The 10% tariff that Trump placed on Chinese imports in February is now doubled to 20%. Economists, including those at Goldman Sachs, estimate a 90% likelihood of further escalation with China, underscoring the seriousness of these threats.
The administration also considered 25% tariffs on imports from Canada and Mexico, initially announced for February 1, 2025, which would have affected North America’s integrated supply chains. Following negotiations, these were deferred until March 2025 in exchange for commitments on border security. Then starting just past midnight, of March 4, 2025, imports from Canada and Mexico are to be taxed at 25%, with Canadian energy products subject to 10% import duties. The latest news is Trump has now signed an executive order suspending new tariffs on many imports from Mexico and Canada, just two days after he imposed sweeping levies on two of America’s closest economic partners. The reversal is a whipsaw reversal that followed days of economic turmoil.
Another significant policy is the “fair and reciprocal” tariff initiative, outlined in a February 13, 2025, memorandum, which seeks to align U.S. tariffs with those of other nations, such as raising the U.S. duty on European cars from 2.5% to match the EU’s 10% rate. This review, due by August 2025, signals a potential broadening of tariff targets.
Additionally, global steel and aluminum tariffs have been reinstated at 25%, effective March 12, 2025, benefiting U.S. producers while raising costs for manufacturers. The closure of the “de minimis” loophole, which previously allowed duty-free imports under $800, has disrupted e-commerce flows from China. On the technology front, tightened U.S. export controls on semiconductors to China have been met with China’s restrictions on rare mineral exports, intensifying a parallel tech conflict. These actions collectively reflect a bolder and more comprehensive trade strategy than what we’ve seen previously.
International Response and Geopolitical Shifts
The global reaction to these U.S. policies has been multifaceted. Beijing retaliated with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen. Beijing has also restricted exports of critical minerals like gallium and germanium (both are vital for technology production) and is accelerating its self-reliance efforts through initiatives like “Made in China 2025.” Canadian Prime Minister Justin Trudeau said his country would slap tariffs on more than $100 billion of American goods over the course of 21 days, while Mexico didn’t immediately detail any retaliatory measures.
The European Union is engaging in diplomacy to avoid reciprocal tariffs, potentially adjusting its own rates to placate Washington, while preparing retaliatory measures if negotiations falter. Emerging markets such as Vietnam and India are capitalizing on supply chain shifts, attracting investment as alternatives to China. Geopolitically, these tensions are fragmenting trade into blocs, with China strengthening ties with Russia and Asia, and the U.S. promoting “friend-shoring” with allies. This realignment suggests a move away from a unified global trade system toward more regionalized economic structures.
Impact Analysis by Country & Region
In the United States, the trade war is yielding mixed outcomes. Consumers are experiencing higher prices on imported goods, from electronics to vehicles, with potential inflation risks that could temper economic growth. Exporters, particularly in agriculture and energy, are losing competitiveness due to retaliatory tariffs, while steel and aluminum producers gain from renewed protection. China faces export declines and manufacturing slowdowns, but is mitigating these through domestic stimulus and technological investment. Europe is navigating threats to its automotive sector, while pursuing a “de-risking” strategy from China, balancing economic ties with both the U.S. and China.
Across Asia, countries like Vietnam and India are emerging as beneficiaries, absorbing production shifts from China, while Japan and South Korea grapple with supply chain complexities. In Latin America, Brazil is securing agricultural markets lost by the U.S., while Mexico balances nearshoring gains with tariff risks. Africa and the Middle East are adjusting to commodity trade shifts, with potential for increased Chinese investment. These regional dynamics highlight the uneven economic fallout of the trade war.
Sector Impacts: Industries in Focus
Several industries are notably affected by these developments. In manufacturing, U.S. steel producers like U.S. Steel benefit from tariffs, but machinery firms such as Caterpillar face challenges from China’s retaliatory duties. The technology sector is under strain, with companies like Qualcomm and Nvidia losing China sales due to export bans, and Apple contending with higher costs from its China-centric supply chain. Automotive firms, including General Motors and Ford, risk cost increases from potential North American tariffs, while Tesla’s significant operations in China expose it to geopolitical volatility.
Agriculture continues to suffer, with U.S. farmers losing ground to competitors like Brazil due to China’s tariffs. In retail, companies like Walmart, heavily reliant on Chinese imports, are adjusting sourcing strategies as costs rise. These sector-specific impacts underscore the need for businesses to adapt to shifting trade realities.
Conclusion and Investment Implications
Trade War 2.0 presents a complex landscape of risks and opportunities. Its expansive scope introduces inflationary pressures, supply chain disruptions and market volatility, yet it also fosters growth in certain protected sectors and emerging markets. For investors, this environment emphasizes the importance of diversification across regions and industries to mitigate exposure to tariff-related shocks. Sectors such as technology and automotive may face earnings uncertainty, while trends like supply chain relocation could benefit logistics and industrial real estate in places like Vietnam.
Investment Considerations
My team and I at Robertson Stephens are committed to monitoring these developments and their implications for your portfolios. While the trade war’s trajectory remains uncertain—potentially leading to negotiations or an entrenched new normal—our approach is to maintain a balanced perspective, avoiding reactive shifts while ensuring your investments are positioned to weather volatility.
If you wish to meet with me about your portfolio and what adjustments may be necessary, feel free to contact our office in San Ramon or Burlingame. I welcome your questions and look forward to discussing how these events align with your financial objectives in our personal session.
Our clients rely on us for timely information, and our job is to deliver.
Citations and References
- Tesla’s China Nightmare: Trade War Data Blockade & FSD Gamble
- Wikipedia – Second Trump Tariffs
- Tax Foundation – Trump Tariffs & Trade War
- ING Think – Trump’s Tariff War: Asia’s Winners and Losers
- TIME – China’s Retaliatory Tariffs Impact
- Tesla’s Driving Ambitions & China Trade War Quandary
- Allianz Global Investors – New World Re-Order: Trump Tariffs Reshape Supply Chains
- Brookings – China’s Retaliatory Tariffs Will Hurt Trump-Voting Counties Most
- Business Insider – Trump’s Tariffs & Trade War: What It Means for Consumers
- China Briefing – US-China Relations in the Trump 2.0 Era: Implications
- EY Insights – Tariffs Explained: Your Macro Questions Answered
- Holland & Knight – Overview of President Trump’s Trade Policy to Date
- Kiplinger – Prices to Spike If Trump Levies Canada/Mexico Tariffs
- Nasdaq – Escalating US-China Trade War to Hurt These Stocks in 2025
- Reuters – Tesla & SpaceX as Ideal Trade War Hostages
- Reuters – Walmart Shifts from China to India for Cheaper Imports
- Reuters – Trump Upended Trade Once, Aims to Do So Again with New Tariffs
- Reuters – Apple Supply Chain Data Shows Receding Exposure to China Risks Mount
- US Tariffs on Canada and Mexico Take Effect, as China Takes Aim at US Farm Exports
- Historic Trump Tariffs Go Into Effect Against Canada, Mexico; China Retaliates
Disclosures
Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. Registration does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. This material is for general informational purposes only and should not be construed as investment, tax or legal advice. It does not constitute a recommendation or offer to buy or sell any security, has not been tailored to the needs of any specific investor, and should not provide the basis for any investment decision. Please consult with your Advisor prior to making any investment decisions. The information contained herein was compiled from sources believed to be reliable, but Robertson Stephens does not guarantee its accuracy or completeness. Information, views and opinions are current as of the date of this presentation, are based on the information available at the time, and are subject to change based on market and other conditions. Robertson Stephens assumes no duty to update this information. Unless otherwise noted, any individual opinions presented are those of the author and not necessarily those of Robertson Stephens. Performance may be compared to several indices. Indices are unmanaged and reflect the reinvestment of all income or dividends but do not reflect the deduction of any fees or expenses which would reduce returns. A complete list of Robertson Stephens Investment Office recommendations over the previous 12 months is available upon request. Past performance does not guarantee future results. Forward-looking performance objectives, targets or estimates are not guaranteed and may not be achieved. Investing entails risks, including possible loss of principal. Alternative investments are speculative and involve substantial risks including significant loss of principal, high illiquidity, long time horizons, uneven growth rates, high fees, onerous tax consequences, limited transparency and limited regulation. Alternative investments are not suitable for all investors and are only available to qualified investors. Please refer to the private placement memorandum for a complete listing and description of terms and risks. This material is an investment advisory publication intended for investment advisory clients and prospective clients only. Robertson Stephens only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Robertson Stephens’ current written disclosure brochure filed with the SEC which discusses, among other things, Robertson Stephens’ business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. © 2025 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.
Securities offered through Fortune Financial Services, Inc. Member FINRA/SIPC. Robertson Stephens Wealth Management, LLC and Fortune Financial Services, Inc. are separate entities and are not affiliated.
For information about Robertson Stephens, go to www.rscapital.com.
The New Trade War: Lessons from 2018-2020 and What’s Next
By John Lau
March 6, 2025 – Trade policies don’t always make headlines, but when they do, it’s usually because they’re creating disruptions. With tariffs expanding and global trade relationships shifting, the current landscape demands a closer look. Recent developments have introduced significant uncertainties for businesses, investors, and policymakers, and I felt it was important to provide a clear and structured analysis of what’s happening.
This overview breaks down the key developments in the escalating trade conflict under Trump’s second term, commonly referred to as “Trade War 2.0”. I’ll also compare them to the 2018-2020 trade war and assess their implications for global economies and investment landscapes. My intent here is to offer a clear and professional perspective on these events, focusing on the broader economic picture, rather than specific investment recommendations or performance data.
One caveat: Given the rapid pace of developments changing daily and even hourly, it’s impossible to have the most up-to-date information at any single moment, but hopefully this analysis can provide a structured framework to navigate the unfolding landscape.
The Dawn of Trade War 2.0
Since assuming office in January 2025, President Trump has reignited trade tensions with a strategy that surpasses the scope of his first term. Unlike the 2018-2020 trade war, which primarily targeted China, this new phase involves a wider array of countries and industries. The administration has acknowledged that these policies may lead to higher consumer prices in the U.S., framing it as a necessary cost to advance national interests. Where the earlier conflict focused on specific goods like steel and Chinese exports, Trade War 2.0 introduces broader measures, including tariffs on all imports and heightened restrictions on technology transfers. This escalation has prompted rapid responses from trading partners, creating a dynamic and challenging global trade environment as we progress through 2025. To understand this shift, let us first revisit the key aspects of the initial trade war before examining the current landscape.
Flashback: Trade War 1.0 (2018-2020) in Brief
The trade war of 2018-2020 began with the U.S. imposing tariffs of 10% to 25% on approximately $370 billion of Chinese goods, citing unfair trade practices. China responded with tariffs of 5% to 10% on $75 billion of U.S. exports, affecting products such as soybeans, automobiles, and energy commodities. These duties largely translated into higher costs for American consumers. Businesses adapted by rerouting supply chains, with some production moving to countries like Vietnam and Mexico. Domestic steel producers benefited from a 25% tariff on imported metals, but U.S. exporters faced significant setbacks. For instance, China shifted its soybean purchases to Brazil, a market loss that never fully recovered, while Boeing saw orders decline in favor of Airbus. The “Phase One” agreement in January 2020 offered a temporary reprieve, with China committing to purchase an additional $200 billion in U.S. goods, though it fell short of this goal, leaving many tariffs in place through 2024. This backdrop of unresolved tensions paved the way for the more expansive approach we see today.
Major Developments in Trade War 2.0 (2025-Present)
Trump’s renewed trade agenda has introduced a series of impactful measures in 2025. One of the most notable proposals is a 10% tariff on all U.S. imports, encompassing over $2.8 trillion in goods from all trading partners—a stark contrast to the targeted duties of the past. As a first step, a 10% tariff on Chinese imports was enacted on February 4, 2025, with threats of increases up to 60% if China does not concede to U.S. demands. The 10% tariff that Trump placed on Chinese imports in February is now doubled to 20%. Economists, including those at Goldman Sachs, estimate a 90% likelihood of further escalation with China, underscoring the seriousness of these threats.
The administration also considered 25% tariffs on imports from Canada and Mexico, initially announced for February 1, 2025, which would have affected North America’s integrated supply chains. Following negotiations, these were deferred until March 2025 in exchange for commitments on border security. Then starting just past midnight, of March 4, 2025, imports from Canada and Mexico are to be taxed at 25%, with Canadian energy products subject to 10% import duties. The latest news is Trump has now signed an executive order suspending new tariffs on many imports from Mexico and Canada, just two days after he imposed sweeping levies on two of America’s closest economic partners. The reversal is a whipsaw reversal that followed days of economic turmoil.
Another significant policy is the “fair and reciprocal” tariff initiative, outlined in a February 13, 2025, memorandum, which seeks to align U.S. tariffs with those of other nations, such as raising the U.S. duty on European cars from 2.5% to match the EU’s 10% rate. This review, due by August 2025, signals a potential broadening of tariff targets.
Additionally, global steel and aluminum tariffs have been reinstated at 25%, effective March 12, 2025, benefiting U.S. producers while raising costs for manufacturers. The closure of the “de minimis” loophole, which previously allowed duty-free imports under $800, has disrupted e-commerce flows from China. On the technology front, tightened U.S. export controls on semiconductors to China have been met with China’s restrictions on rare mineral exports, intensifying a parallel tech conflict. These actions collectively reflect a bolder and more comprehensive trade strategy than what we’ve seen previously.
International Response and Geopolitical Shifts
The global reaction to these U.S. policies has been multifaceted. Beijing retaliated with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen. Beijing has also restricted exports of critical minerals like gallium and germanium (both are vital for technology production) and is accelerating its self-reliance efforts through initiatives like “Made in China 2025.” Canadian Prime Minister Justin Trudeau said his country would slap tariffs on more than $100 billion of American goods over the course of 21 days, while Mexico didn’t immediately detail any retaliatory measures.
The European Union is engaging in diplomacy to avoid reciprocal tariffs, potentially adjusting its own rates to placate Washington, while preparing retaliatory measures if negotiations falter. Emerging markets such as Vietnam and India are capitalizing on supply chain shifts, attracting investment as alternatives to China. Geopolitically, these tensions are fragmenting trade into blocs, with China strengthening ties with Russia and Asia, and the U.S. promoting “friend-shoring” with allies. This realignment suggests a move away from a unified global trade system toward more regionalized economic structures.
Impact Analysis by Country & Region
In the United States, the trade war is yielding mixed outcomes. Consumers are experiencing higher prices on imported goods, from electronics to vehicles, with potential inflation risks that could temper economic growth. Exporters, particularly in agriculture and energy, are losing competitiveness due to retaliatory tariffs, while steel and aluminum producers gain from renewed protection. China faces export declines and manufacturing slowdowns, but is mitigating these through domestic stimulus and technological investment. Europe is navigating threats to its automotive sector, while pursuing a “de-risking” strategy from China, balancing economic ties with both the U.S. and China.
Across Asia, countries like Vietnam and India are emerging as beneficiaries, absorbing production shifts from China, while Japan and South Korea grapple with supply chain complexities. In Latin America, Brazil is securing agricultural markets lost by the U.S., while Mexico balances nearshoring gains with tariff risks. Africa and the Middle East are adjusting to commodity trade shifts, with potential for increased Chinese investment. These regional dynamics highlight the uneven economic fallout of the trade war.
Sector Impacts: Industries in Focus
Several industries are notably affected by these developments. In manufacturing, U.S. steel producers like U.S. Steel benefit from tariffs, but machinery firms such as Caterpillar face challenges from China’s retaliatory duties. The technology sector is under strain, with companies like Qualcomm and Nvidia losing China sales due to export bans, and Apple contending with higher costs from its China-centric supply chain. Automotive firms, including General Motors and Ford, risk cost increases from potential North American tariffs, while Tesla’s significant operations in China expose it to geopolitical volatility.
Agriculture continues to suffer, with U.S. farmers losing ground to competitors like Brazil due to China’s tariffs. In retail, companies like Walmart, heavily reliant on Chinese imports, are adjusting sourcing strategies as costs rise. These sector-specific impacts underscore the need for businesses to adapt to shifting trade realities.
Conclusion and Investment Implications
Trade War 2.0 presents a complex landscape of risks and opportunities. Its expansive scope introduces inflationary pressures, supply chain disruptions and market volatility, yet it also fosters growth in certain protected sectors and emerging markets. For investors, this environment emphasizes the importance of diversification across regions and industries to mitigate exposure to tariff-related shocks. Sectors such as technology and automotive may face earnings uncertainty, while trends like supply chain relocation could benefit logistics and industrial real estate in places like Vietnam.
Investment Considerations
My team and I at Robertson Stephens are committed to monitoring these developments and their implications for your portfolios. While the trade war’s trajectory remains uncertain—potentially leading to negotiations or an entrenched new normal—our approach is to maintain a balanced perspective, avoiding reactive shifts while ensuring your investments are positioned to weather volatility.
If you wish to meet with me about your portfolio and what adjustments may be necessary, feel free to contact our office in San Ramon or Burlingame. I welcome your questions and look forward to discussing how these events align with your financial objectives in our personal session.
Our clients rely on us for timely information, and our job is to deliver.
Citations and References
Disclosures
Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. Registration does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. This material is for general informational purposes only and should not be construed as investment, tax or legal advice. It does not constitute a recommendation or offer to buy or sell any security, has not been tailored to the needs of any specific investor, and should not provide the basis for any investment decision. Please consult with your Advisor prior to making any investment decisions. The information contained herein was compiled from sources believed to be reliable, but Robertson Stephens does not guarantee its accuracy or completeness. Information, views and opinions are current as of the date of this presentation, are based on the information available at the time, and are subject to change based on market and other conditions. Robertson Stephens assumes no duty to update this information. Unless otherwise noted, any individual opinions presented are those of the author and not necessarily those of Robertson Stephens. Performance may be compared to several indices. Indices are unmanaged and reflect the reinvestment of all income or dividends but do not reflect the deduction of any fees or expenses which would reduce returns. A complete list of Robertson Stephens Investment Office recommendations over the previous 12 months is available upon request. Past performance does not guarantee future results. Forward-looking performance objectives, targets or estimates are not guaranteed and may not be achieved. Investing entails risks, including possible loss of principal. Alternative investments are speculative and involve substantial risks including significant loss of principal, high illiquidity, long time horizons, uneven growth rates, high fees, onerous tax consequences, limited transparency and limited regulation. Alternative investments are not suitable for all investors and are only available to qualified investors. Please refer to the private placement memorandum for a complete listing and description of terms and risks. This material is an investment advisory publication intended for investment advisory clients and prospective clients only. Robertson Stephens only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Robertson Stephens’ current written disclosure brochure filed with the SEC which discusses, among other things, Robertson Stephens’ business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. © 2025 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.
Securities offered through Fortune Financial Services, Inc. Member FINRA/SIPC. Robertson Stephens Wealth Management, LLC and Fortune Financial Services, Inc. are separate entities and are not affiliated.
For information about Robertson Stephens, go to www.rscapital.com.
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