The News
US President Donald Trump’s unveiling of long-awaited tariffs Wednesday marked the most drastic reimagining of global trade in generations, as the stark projection of American power sparked fury abroad and sent stock markets plummeting.
The US leader’s announcement of 10% baseline levies on all foreign imports, plus far higher tariffs on many key trading partners, means no allies have escaped unscathed, though the impact of the levies are likely to be felt unequally.
The punitive tariffs, steeper than many analysts expected, represent the culmination of Trump’s decades-long desire to redress an international trading order he sees as unfair — despite widespread warnings that in an escalating global trade war, America too stands to lose.
SIGNALS
Trump’s tariffs are not a negotiating tactic
While the highest levies don’t take effect until April 9, theoretically allowing time for talks, countries hoping for a speedy reprieve are likely to be disappointed: “This is not a negotiation, it’s a national emergency,” one White House official told the BBC. Whereas Trump in his first term mostly used tariffs as leverage, this administration sees them as a way to reshore supply chains, revitalize manufacturing and fund tax cuts, Eurasia Group’s Ian Bremmer noted. Trump has already acknowledged tariffs will cause pain for US consumers and businesses, indicating that he is “likely to stay the course even in the face of severe economic dislocation,” Bremmer wrote. But companies looking to move their manufacturing to the US “face a long and bumpy road,” an economist argued in Barron’s. Reshoring typically takes three to 10 years, she wrote, and many industries require a level of quality infrastructure and skilled labor that the US lacks.
‘Retaliation day’ looms as trade war set in motion
Treasury Secretary Scott Bessent issued a warning to US trading partners shortly after Trump’s announcement: “Do not retaliate.” Yet analysts believe that China, the EU and other major powers will have little choice but to respond: “‘Retaliation day’ will follow ‘liberation day’,” an asset manager told the Financial Times. Trump’s moves “could harden views in Beijing and lead to serious escalation far beyond tariffs,” including further restrictions on US companies operating in China, an analyst told Bloomberg. But if countries choose to hit back with their own levies, they may find that “retaliation carries a cost,” and could “stoke further escalation from America,” The Economist wrote. In any case, many smaller Asian economies — among those hardest hit by the new levies — “aren’t really in a position to retaliate,” an economist told Al Jazeera.
The end of globalization?
Trump’s tariff blitz upends a decades-long shift toward freer global movement of goods and services, with The Economist arguing that it “takes America’s trade policies back to the 19th century.” The assault on key partners that Trump believes “rip off” the US is intended to send a clear message that “the era of globalization is over,” The Wall Street Journal noted, with a Morgan Stanley economist telling the outlet that untangling world supply chains will be slow, expensive, and difficult. Yet some experts believe that it is too early to call globalization’s demise: One expert argued in The Conversation that deglobalizing runs “contrary to the interests of US capital,” which needs to expand into new territories and sectors to survive. And while protectionism cycles in and out of fashion, trade is always likely to flow wherever it can find a comparative advantage, likely leading to global ties being reshaped rather than severed: “In the long run, the economic motive behind globalisation in all its forms gives it extraordinary staying power,” the Financial Times argued.