The year tariffs upended global trade

Summary

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Podcast Summary: Marketplace Morning Report

Episode: The year tariffs upended global trade
Host: Gideon Long (Marketplace/BBC World Service)
Date: December 26, 2025

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Overview

This episode of the Marketplace Morning Report explores the widespread effects of new U.S. tariffs on global trade throughout 2025—a year defined by protectionist moves and rapid policy changes. With voices from Mexico, Asia, and local business owners, the episode explains how tariff hikes—especially the end of the "de minimis" rule—reshaped supply chains, business strategy, and consumer prices worldwide.

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Key Discussion Points & Insights

1. The Year of Tariffs (01:01)

• Host Gideon Long frames tariffs as the dominant story of 2025, particularly U.S. import taxes central to President Trump's trade policy.
• Tariffs forced countries and companies worldwide to adapt quickly, reshaping trade patterns and relationships.

2. Mexico and U.S. Relations (01:34)

• Will Grant (BBC, Mexico):
  • Mexico, as the U.S.'s biggest trading partner, largely avoided the harshest new tariffs by complying with U.S. demands, specifically by cracking down on fentanyl trafficking.
  • Not all issues are resolved:
    • Tomato tariffs: A 17% "anti-dumping" tariff remains over disputes about Mexican farmers undercutting Californian producers.
    • Water dispute: The U.S. threatens further sanctions over a 1940s cross-border water-sharing agreement, with Mexico struggling to meet obligations due to historic drought.
  • Both nations face continued negotiation as they approach high-profile collaboration in 2026 with the FIFA World Cup.
  • Quote:

    "There are real effects of how tariffs have hit Mexico. Take the tomatoes at this stand—they're still the subject of a 17% tariff..." —Will Grant (01:47)

3. Asia-Pacific Trade Jitters & Adaptations (02:47)

• Suranjana Tiwari (BBC, Singapore):
  • The Trump-Xi deal (in South Korea) partially eased China-U.S. tensions, with China suspending some rare earth export controls and lowering tariffs on select U.S. goods in exchange for reciprocal moves.
  • Asian countries are highly dependent on U.S.-China trade flow. Examples:
    • Indonesia & Malaysia: Sectors like textiles and footwear risk from slowing demand.
    • China: Found new markets and posted over $1 trillion in exports in 2025.
    • Japan & South Korea: Diversified exports to Southeast Asia and Europe.
    • Vietnam: Targeted with ~20% U.S. tariffs, yet shows economic resilience.
  • The uncertainty prompts a "China Plus One" strategy—moving manufacturing from China to Vietnam, Thailand, etc.
  • Quote:

    "Across Asia more broadly, businesses are nervous. The uncertainty of tariffs makes planning tough, pushing many to look for more reliable partners in Latin America and the Middle East." —Suranjana Tiwari (04:22)

4. Tariff Impacts by the Numbers (04:28)

• India: Despite a steep 50% import tariff, exports to the U.S. in November jumped 22% year-over-year.
• Switzerland: Saw relief as U.S. tariffs dropped from 39% to 15% in December.

5. End of the "$800 De Minimis" Rule (04:42)

• Major policy shift: The U.S. ended its long-standing de minimis exemption, which previously allowed parcels under $800 to enter the U.S. duty-free.
• Background:
  • Almost 1.4 billion parcels entered the U.S. duty-free last year, a boon for overseas e-commerce (notably from Chinese retailers Shein and Temu).

a. Small Business Voices (05:09)

• Jess Van Dan (Australian jewelry exporter):

  • Lost 30–40% of business when the U.S. market became inaccessible after the rule change.
  • Quote:

    "30 to 40% of my jewelry business was in the US and now I've had to stop that entire part of my business." —Jess Van Dan (06:17)

• Madeline Knutson (Mail order business, N. Dakota):

  • Has become more cautious about sourcing and prices due to raised import costs.
  • Quote:

    "People are definitely looking at prices more." —Madeline Knutson (06:44)

b. The Policy Rationale (05:49)

• President Trump:
  • Argued de minimis was "a big scam going on against our country, against really small businesses." (05:49)
• Commerce Secretary Howard Lutnick:
  • Claimed the exemption undermined domestic small businesses. (06:01)

c. Measured Effects (06:58)

• After abolition, incoming parcels under $800 fell by 54% (Universal Postal Union).
• Logistics Winner: Oscar de Bock (DHL): Called 2025 "a super complex year" and noted high shipping activity right before new tariffs took effect, benefiting the logistics sector.
  • Quote:

    "Internally, I say we love complexity because that's in the end the value that we bring to our customers. But absolutely, 2025 has been a super complex year." —Oscar de Bock (07:24)

d. Consumer Impact (07:55)

• Prices for consumers across the board have risen. Small, "mom and pop" retailers struggle most to absorb new costs, unlike larger competitors.
• Quote:

  "We can't eat all the extra costs, like we have to charge based on what the price of the product is including that shipping and import." —Madeline Knutson (07:55)

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Notable Quotes & Moments (with Timestamps)

• "There's one word that's dominated the headlines this year, and it begins with T. Tariffs." —Gideon Long (01:01)
• "The U.S. has threatened to impose significant sanctions on Mexico unless it upholds its side of a water sharing agreement which dates back to the 1940s." —Will Grant (02:19)
• "Vietnam faced some of the highest U.S. tariffs, around 20% after negotiations because of its role in U.S. supply chains. Economists say the country remains resilient." —Suranjana Tiwari (03:43)
• "De minimis is a big deal. It's a big scam going on against our country, against really small businesses." —President Trump (05:49)
• "Since the de minimis exemption was abolished, the number of parcels ... has fallen by 54%." —Narrator (06:58)
• "2025 has been a super complex year. Every time that something new got announced, then shippers were making sure ... their products would be shipped before this new tariff would come." —Oscar de Bock (07:24)
• "Across the board, prices are just higher... we have to charge based on what the price of the product is including that shipping and import." —Madeline Knutson (07:55)

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Important Timestamps

• 01:01 – Introduction: Why tariffs dominated 2025 business headlines
• 01:34 – Will Grant on Mexico’s tomato tariffs and water dispute
• 02:47 – Suranjana Tiwari on Asia-Pacific responses to tariffs
• 04:28 – India & Switzerland: Trade numbers despite tariffs
• 05:09 – De minimis rule explained (historic context and scale)
• 06:17 – Small exporters discuss lost U.S. sales
• 06:58 – Parcel volume drop & logistics sector’s response
• 07:55 – Consumer price hikes and small U.S. retailers’ struggles

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Tone & Language

The episode maintains a clear, journalistic tone with concise summaries and on-the-ground insights from BBC correspondents. Personal stories from affected business owners add urgency and relatability to the global economic data.

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Conclusion

In less than ten minutes, this Marketplace Morning Report delivers a comprehensive account of how the United States’ sweeping new tariffs rippled across the globe in 2025—disrupting trade partners, supply chains, and small businesses, while prompting adaptation, innovation, and new headaches for everyone from policymakers to consumers.

Transcript

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[Gideon Long]

Let'S take a look at where we are with tariffs in the UK this is the Marketplace Morning Report from the BBC World Service. I'm Gideon Long. Good morning. There's one word that's dominated the headlines this year, and it begins with T. Tariffs. Countries around the world have been grappling with the US Import taxes that were central to President Trump's trade strategy. It's been a bumpy ride for many. So how are countries meeting the challenges they're facing? Let's start with Mexico. Here's the BBC's Will Grant.

[Will Grant]

It's been a complex year for Mexico in terms of its relationship with the US and the Trump administration. Mexico is the US s biggest trading partner, and by and large, Mexico has escaped the worst of the tariffs imposed on other nations, in part by upping the fight on fentanyl, as President President Trump had demanded. However, the relationship isn't entirely fixed. I'm speaking to you from my local covered market here. There are real effects of how tariffs have hit Mexico. Take the tomatoes at this stand, they're still the subject of a 17% tariff, what's called an anti dumping tariff over a dispute to do with Mexican farmers undercutting Californian producers. More essential than that, though, is water. The US has threatened to impose significant sanctions on Mexico unless it upholds its side of a water sharing agreement which dates back to the 1940s. The difficulty is that Mexico is meant to send water from an area trapped in its worst drought for many decades, so there's still much to deal with between these two neighbors as they move into 2026, when of course, they'll co host the FIFA World cup together, will Grant there.

[Gideon Long]

China spent much of the year at the top of the White House list of trade adversaries. Other countries in the Asia Pacific region have faced a balancing act of maintaining relationships with both Beijing and Washington while also shoring up their own markets. In Singapore, the BBC's Suranjana Teowari has the details.

[Suranjana Tiwari]

US President Donald Trump's aggressive tariff policies have shaken up the Asia Pacific this year. Take China. Trump and President Xi Jinping met in South Korea and reached a deal that eased some of the tension. China agreed to suspend export controls on rare earths and ease some tariffs on U.S. goods like soybeans. The U.S. in turn, lowered some tariffs on Chinese products. Many Asian countries depend on US China trade. Indonesia and Malaysia, for example, could see industries like textiles and footwear hit by slower global demand. But China has also found new markets. Exports topped $1 trillion in 2025. Japan and South Korea are diversifying, too, sending vehicles, electronics and chips to Southeast Asia and Europe. Vietnam faced some of the highest U.S. tariffs, around 20%, after negotiations because of its role in U.S. supply chains. Economists say the country remains resilient, though across Asia more broadly, businesses are nervous. The uncertainty of tariffs makes planning tough, pushing many to look for more reliable partners in Latin America and the Middle East. And the China plus one strategy moving factories to Vietnam, Thailand and elsewhere could become a bigger focus.

[Gideon Long]

That was Suranjana Tiwari. Let's do the numbers. 22%. That's how much India's exports to the US jumped in November compared to the year before, despite the country facing a steep 50% tariff. And Switzerland received a welcome holiday gift in the form of a 15% tariff this month, down from 39% as announced in August. A key trade policy of the Trump administration was to end the tax exemption of parcels under a value of $800, the de minimis rule. So what's happening now? Four months on the BBC's William Lee Adams has more.

[Madeleine Knutson]

And across the globe, postal services are pausing deliveries to the US As Washington prepares to end its long ha held.

[Narrator/Advertiser]

Tariff exemption on low value parcels until August. Anyone could send a parcel to the United States tariff free, so long as the value of the item was less than $800. The exemption was known as de minimis. That's Latin for small things. Businesses from around the world took advantage of the rule. Almost 1.4 billion packages entered the US duty free last year, with two of China's largest online retailers, Shein and Temu, each sending hundreds of millions of parcels to the states annually. The de minimis rule found itself in the sight of President Trump.

[Will Grant]

De minimis is a big deal. It's a big scam going on against our country, against really small businesses.

[Narrator/Advertiser]

U.S. commerce Secretary Howard Lutnick explained why the tax exemption had to go Foreign.

[Will Grant]

Countries were sending in little packages for free and knocking out our mom and pop businesses across America.

[Narrator/Advertiser]

The most immediate impact of the end of the de minimis exemptions was on businesses outside of the U.S. here's Jess Van Dan, a jewelry maker based in Australia.

[Madeleine Knutson]

30 to 40% of my jewelry business.

[Suranjana Tiwari]

Was in the US and now I've had to stop that entire part of my business.

[Madeleine Knutson]

And I'm not the only one.

[Suranjana Tiwari]

There's so many people who have even.

[Narrator/Advertiser]

Higher percentages in removing the tax exemption, the White House said it wanted to level the playing field for US Companies. So have they seen a difference since the changes? Madeline Knutson, who runs a mail order business out of Minot in North Dakota, says she's much more careful about where she buys her products from.

[Madeleine Knutson]

I found that whether it's consciously, unconsciously, I tend to look where they're shipping from because that impact has caused us to raise our prices for things. People are definitely looking at prices more.

[Narrator/Advertiser]

Since the de minimis exemption was abolished, the number of parcels coming into the US worth less than $800 has fallen by 54%. That's according to the Universal Postal Union, a United nations agency. One sector that has done well out of the changes is the logistics business. DHL is one of the world's leading courier companies and, and Oscar de Bock leads its global forwarding division. He says it's been a complex but profitable year for the firm.

[Oscar de Bock]

Internally, I say we love complexity because that's in the end the value that we, that we bring to our customers. But absolutely, 2025 has been a super complex year. Every time that something new got announced, then shippers were making sure that their products would be shipped before this new tariff would come. So we got high seasons, many of them throughout the year. While normally you would have to the usual ones before Christmas, Easter and a few others.

[Narrator/Advertiser]

Back to the effect on the consumer. Here's Madeleine Knutson again.

[Madeleine Knutson]

Across the board, prices are just higher. You know, with a bigger business, they're able to like beat the cost a little bit more to keep it less expensive. Where we, you know, we're just a little like mom and pop shop so we can't eat all the extra costs like we have to charge based on what the price of the product is including that shipping and import.

[Narrator/Advertiser]

The removal of the de minimis rule represented a seismic shift, but as the flow of tax free goods slows, it seems it may be us producers and customers who are covering the costs. I'm the BBC's William Lee Adams for.

[Gideon Long]

Marketplace in the UK. I'm Gideon Long with the Marketplace morning report from the BBC World Service.

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