US President Donald Trump, who is often teased for not taking bold steps, has surprised many by earning nearly $50 billion through his new tariff policy. While many expected other countries to fight back, only China and Canada have responded in a big way.

According to the US Treasury, the US made $64 billion in customs revenue between April and June this year, that’s $47 billion more than the same period last year. It’s a record high. Trump’s new trade rules include: At least 10% tax on goods from around the world, 50% tax on steel and aluminium, and 25% tax on imported cars. When this policy was announced four months ago, many feared a major trade war, but that hasn’t really happened.

Why no trade war?

There was no major trade war because most countries chose to stay calm and didn’t hit back. Experts say countries still remember the 2018–2019 trade war, where reacting strongly only made things worse. So now, they’re being more careful. China has tried to push back by adding its tariffs, but it hasn’t helped them much. In May 2025, China’s earnings from customs duties went up by just 1.9% compared to last year.

Canada also added C$155 billion worth of taxes on US goods earlier this year. But their economy started feeling the pressure, so they stopped. Most of America’s major trade partners are not responding directly to President Donald Trump’s high tariffs. Instead, they are quietly negotiating behind the scenes to avoid a bigger trade war.

How are other countries reacting

The European Union (EU), which is the world’s largest trading bloc, has prepared its own set of retaliatory tariffs on American goods worth €72 billion. This includes products like aircraft, bourbon, and cars. However, the EU hasn’t implemented these tariffs yet. According to reports, they are waiting until August 1,  the deadline Trump gave for ongoing trade negotiations, before making any final move.

An EU official explained that these trade decisions are linked to larger issues, including US support for Ukraine and other international matters, not just trade. This shows how deeply connected global politics and trade policies are right now. Big companies like Apple, Adidas, and Mercedes-Benz are trying to protect US consumers from rising prices. They are either changing how they source materials or absorbing the extra costs themselves.

Trump’s current tariff rates are the highest the US has seen since the 1930s, during the time of the Smoot-Hawley Tariff Act, which had worsened the Great Depression. Mexico, which is now the US’s biggest trading partner, has also chosen not to retaliate. Its President, Claudia Sheinbaum, believes in finding a peaceful and practical solution instead of adding more pressure through counter-tariffs.

China had reacted strongly at first by imposing tariffs as high as 145%. But after a 90-day truce agreement in Geneva this May, China reduced those tariffs to around 30%. Canada, too, has stepped back. Earlier, Canadian leaders spoke strongly and even planned a digital services tax. But under pressure, Prime Minister Mark Carney dropped those plans and also decided not to match Trump’s steep steel tariffs.

Looking ahead, the European Commission has quietly warned that if Trump imposes a 30% tariff on EU exports, it could make trade between the US and Europe nearly impossible. This could damage long-standing economic ties and create major challenges for businesses on both sides.