Introduction

On 2 April 2025, under the International Emergency Economic Powers Act (IEEPA) of 1977, US President Donald Trump announced a barrage of reciprocal tariffs on a number of countries, irrespective of allies or adversaries, with the stated aim of reducing the enormous trade deficit America had, claiming the day as a ‘Liberation Day’. In a highly globalized and integrated world, such sweeping tariffs are expected not only to disrupt the bilateral trade flows but also the global supply chains, investment strategies, and diplomatic relations. Therefore, it is imperative to delve deeper into understanding how different nations are responding to these tariffs, how they differ in their approaches, and what economic and political rationale is behind their negotiations and retaliations to the tariffs, thus affecting their bilateral relations with the world’s largest economy.

The paper attempts to understand the types of approaches nations are adopting to facilitate their trade relations, with a focus on five key actors, namely ASEAN, India, China, Canada, and the European Union. The countries are selected based on their economic dependency, diplomatic and political alignments with the US. Holistically, the outlook of these five nations gives a comprehensive representation of global reactions, spanning across allies and adversaries of the US, collective multilateral blocs, and individual economies, inclusive of both rising and advanced economies. ASEAN, a culmination of emerging economies, is deeply centred in the US supply chains and drives their growth from its export orientation. It is intriguing to analyse how the heterogeneous stance of individual nations towards tariffs incorporates into a comprehensive and unified approach of the bloc to tackle the US. India, which is the fastest-growing economy and a perfect example of maintaining its strategic ties with the West and Global South, presents a case of cautious engagement and rising economic nationalism. China lies at the heart of the US trade deficit and thus offers an exemplary case analysis of confrontation and self-reliance outlook towards Trump’s protectionist sentiments. Canada, a pioneer trading partner and neighbour of the US, highlights how integrated economic partnerships and bilateral dependence through the United States-Mexico-Canada Agreement (USMCA) transform the narrative of North American nations about their outlook on foreign ties. Lastly, for the EU, one of the largest economic entities globally and a persistent US ally, presents a case of balanced and unified strategy while addressing the members’ interests and sovereignty as its top priority, and sets a template as a contrast to the unilateral responses of the US.

Author

Manya Gupta

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