Trade Wars in Full Swing: How Trump's 2025 Tariffs Affect Different Stakeholders of Both U.S. and Chinese Economies

In April 2025 the United States introduced a new set of tariffs under the Trump administration, presented as a way to counter trade imbalances and reduce reliance on foreign supply chains. These tariffs were broader than the ones used in the 2018–2020 trade war and triggered both retaliation abroad and debate inside the U.S. This paper examines what happened to U.S. imports from China after the tariffs, and also to tariff revenue, employment, and firm closures, using an event-study approach with monthly data. The results show a clear drop in targeted imports following the announcement, along with a short-run increase in government revenue from tariffs. However, earlier evidence suggests possible negative problems on US firms through higher input costs and uncertainty. The findings explain that even if the tariffs achieve some of their goals of reducing imports and increasing revenue, they have trade-offs that weaken their effectiveness as a long-term policy.