Breaking Down the $450 Billion of Trade Destruction from U.S. Tariffs
Breaking Down the $450B of Trade Destruction from U.S. Tariffs
On May 12th, 2025, the Trump administration announced a new wave of tariffs on much of the world. The impact on global trade could be massive in the years ahead.
This graphic, created in partnership with the Hinrich Foundation, shows the dollar value of expected trade destruction by economy. It uses data from the UN’s TINA model.
Trump 2.0 Tariffs
Since taking office in late January, President Trump has prioritized disrupting global trade to support domestic industries across America. While tariff details shift frequently, the message is clear: globalization is under threat.
So far, most countries face a 10% tariff. The U.S. has chosen to hit key trading partners—like China, Canada, and Mexico—and industries, such as dairy and lumber, with even steeper penalties.
Trade Destruction: UN Estimates
To measure the long-term impact of the tariffs, the UN estimated trade destruction—also known in econometric terms as “negative trade creation”—by country economy.
Estimates are based on expected changes in import demand, factoring in tariff rates, initial import volumes, and supply and demand elasticities.
The total projected trade loss is a staggering $450 billion. The biggest hits are expected in China (-$156.6 billion), the EU (-$92.6 billion), and Japan (-$27.7 billion). Canada and Mexico, targets of an earlier set of tariffs, were excluded by the UN from this dataset.
| Rank | Affected Economy | Trade Destruction ($ billions) |
|---|---|---|
| 1 | 🇨🇳 China | 156.6 |
| 2 | 🇪🇺 EU | 92.6 |
| 3 | 🇯🇵 Japan | 27.7 |
| 4 | 🇻🇳 Vietnam | 22.5 |
| 5 | 🇰🇷 South Korea | 22.2 |
| 6 | 🇮🇳 India | 14.6 |
| 7 | 🇹🇭 Thailand | 10.3 |
| 8 | 🇬🇧 UK | 9.1 |
| 9 | 🇧🇷 Brazil | 8.7 |
| 10 | 🇮🇩 Indonesia | 6.8 |
| Other | 78.9 | |
| Total | 450.1 |
The expected hit to trade will also adversely impact the domestic economy. The Tax Foundation estimates that Trump 2.0 tariffs are will lower U.S. real GDP by 0.8% over the next decade.
The Future of Global Trade
Globalization and the rise of global trade have fueled economic growth worldwide. By enabling countries to specialize based on comparative advantage, trade made goods more affordable and widely available.
Now, that landscape is shifting. The Trump administration’s tariff policies signal a significant turn in global trade strategy, with far-reaching implications for how countries engage in commerce moving forward.
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