How Much are Countries Affected by the US’s Tariffs?

By: Daniel Hogan, Quinnipiac Economic Research Team

Since taking office, President Trump has repeatedly mentioned imposing tariffs on the United States' trading partners and has begun to follow through. In his first two months, he targeted the country’s three largest trading partners: Canada, Mexico, and China.

On March 4th, a 25% tariff was imposed on all goods from Canada and Mexico after an initial one-month delay. If Canada responds similarly to its initial reaction in February, it is expected to impose retaliatory tariffs of 25% on up to $155 billion worth of U.S. goods, as reported by the Associated Press. Mexico did not initially respond to the February tariffs, but the Brookings Institution has not ruled out the possibility of Mexico implementing equal tariffs on U.S. goods.

According to Trading Economics, trade between Mexico and the U.S. accounts for 43% of Mexico’s GDP. A mutual 25% tariff would be especially detrimental to Mexico, as it is the third most dependent nation on trade with the U.S., following the Marshall Islands (53%) and the Turks and Caicos Islands (48%). In this context, dependency is measured by the sum of imports from and exports to the U.S. as a percentage of a country’s GDP. Canada would be slightly less affected, as U.S. trade accounts for 33% of its GDP.

China was also included in the tariff rounds, with an additional 10% imposed, bringing the total tariff increase to 20% since January. However, trade with the U.S. accounts for only 3% of China’s GDP, making tariffs significantly less impactful on its economy.

As of March 4th, no further tariffs have been imposed, but some countries are more vulnerable than others. The Netherlands, Panama, and Ireland are among the most exposed, with U.S. trade making up 10%, 13%, and 20% of their GDP, respectively. Notably, President Trump previously mentioned reclaiming the Panama Canal during his campaign, making Panama a potential target for tariffs.

Growing tensions between the United States and the European Union also suggest it could become a target. However, while the Netherlands and Ireland remain vulnerable, countries such as the United Kingdom, France, and Poland are more insulated, with U.S. trade accounting for only 4%, 3%, and 3% of their GDP, respectively.

Historically, imposing tariffs has often resulted in economic slowdowns for all parties involved, with few clear winners.