What: Trump administration's new tariff policy targets 44% of US imports, with potential 25% duties on Mexican and Canadian goods and additional 10% on Chinese imports.

Why it is important: This policy shift represents the largest coordinated tariff action by a major economy, potentially triggering retaliatory measures and reshaping international trade relationships.

The US administration's announcement of substantial tariff increases marks a pivotal moment in global trade relations. The new policy would impose 25% tariffs on Mexican and Canadian imports (except for energy and critical minerals at 10%) and an additional 10% on Chinese goods. While implementation for Mexico and Canada is postponed during negotiations, the Chinese tariff increase is already in effect. BCG analysis projects USD 247 billion in additional costs based on current trade flows, with auto parts (USD 36 billion), vehicles (USD 30 billion), and metals (USD 19 billion) facing the heaviest impact.

Companies heavily reliant on these markets could see EBITDA margins decline by 6-14 percentage points. The policy's breadth affects integrated North American supply chains particularly severely, as Canada and Mexico account for significant portions of US imports in key sectors. Retaliatory measures from trading partners, including China's new tariffs on coal and oil and Canada's proposed countermeasures, further complicate the situation.

IADS Notes: The global trade landscape has transformed dramatically in early 2025. On January 14, BCG projected that a 60% tariff on Chinese goods would add USD 640 billion to US import costs , while December 19, 2024, saw Mexico implementing 35% tariffs on textile imports . The impact accelerated on February 4, 2025, when Trump eliminated the USD 800 de minimis rule affecting Shein and Temu , followed by China's immediate retaliatory measures against PVH and other US firms .

These developments compound existing supply chain vulnerabilities identified in January 6, 2025, when BCG's retail forecast emphasized the urgent need for more resilient operational models . This rapid succession of trade policy changes within just two months is forcing retailers to fundamentally restructure their global supply chains and sourcing strategies.

How to prepare for tariffs and the new reality of global trade