Sure A Not

The official start of massive global tariffs was announced on Donald Trump’s” Liberation Day” on April 2, 2025, cappiling the start of escalating disclosures since his election as president. Amplifying the financial patriotism of his first term, it marks the climax of Trump’s decades-old campaigning for raising taxes and reviving British market.

His most recent press builds on more than 20 years of earlier political attempts to reform trade in a much more aggressive way. Influenced by Project 2025’s section on fair business by longtime adviser Peter Navarro, it calls for quick, uncompromising business action to reduce deficits, lower bill and reshore production.

Similar to how Treasury Secretary Scott Bessent has framed taxes as part of a larger financial rebalancing to recover US industrial and economic supremacy.

Though often stated explicitly, Trump aims to crack the supremacy of China’s export-led financial model, with the understanding that there will be some effects for the US economy.

Although his strategy builds on previous attempts to restructure industry, the public’s understanding of Trump’s agenda and perception of how it is carried out are only moderately supported domestically. The bargain carries the dangers of global financial instability, backlash from allies and handing China even more energy on the international stage.

Protectionism, free industry, and renewed skepticism are all at odds with one another.

From 1798 to 1913, tariffs covered 50 % to 90 % of income and shielded American industry from foreign competitors. Nevertheless, the US sought to restore allied markets and ward off communism by opening its buyer, professional, and capital markets following World War II. Trade imbalances emerged by the 1970s, but abandoning the gold standard in 1971 let the US printing money more quickly and support the imbalance.

The US was convinced that it could continue to control worldwide industry on its own terms after the Cold War’s close in the first 1990s. It pushed for global tariff cuts and free trade deals like the North American Free Trade Agreement ( NAFTA ), while US corporations helped build up foreign manufacturing, particularly in China, which benefited from preferential trade terms under its most-favored-nation trade status. While corporate profits rose and global overproduction was absorbed by American consumers, many American workers were becoming significantly indebted.

These policies added to the anti-globalization movements of the late 1990s, most visibly at the 1999 World Trade Organization ( WTO ) summit in Seattle, prompting a rethink of trade policy. Domesticated companies like steel were crashing out as a result of cheap imports, and former US President George W. Bush reintroduced steel tariffs quickly in 2002 before the WTO ratified them.

The 2008 global financial crisis brought republican calling for economic reform, with the Obama administration pledging to reshore manufacturing work. Obama later distanced himself from the Trans-Pacific Partnership ( TPP ), a free trade agreement, in a move that Hillary Clinton repeated in her 2016 presidential campaign.

Trump’s first-term business plan broke from the previous prudence. He withdrew from the TPP in 2017 and fought with the WTO, favoring punitive motion, and renegotiated NAFTA. He therefore imposed tariffs on important business partners, especially China. The cost of outsourcing had already gotten clear by that time.

With US multinational support, China had gained investment and technology skills to become the “world’s factory”. Beijing became the world’s top exporter and creditor in 2024 thanks to low-tariff access to the US market, which resulted in a$ 300 billion surplus over America in 2024.

President Biden struck a less aggressive develop upon assuming office in January 2021, but he also raised taxes on China. He aimed to address the issue of his trade deficits with the US, which the EU and Japan did, but the US’s commitment to global unity and its role in global affairs attenuated condemnation. Despite lowering tariffs on Europe, Biden yet passed the Inflation Reduction Act and CHIPS and Science Act, both criticized by the EU as mercantilist.

Trump’s second-term target has once more targeted allies, but the focus is still on China, with increased tariffs on Beijing and personal tariffs halted on April 9.

Apart from direct exports, Washington also seeks to target China’s role in global business. The limitations of decoupling were exposed by Biden’s force to “nearshore” manufacturing in nations like Mexico, where Chinese companies immediately established themselves in brand-new Latino industrial parks.

Many goods shipped to the US from different countries also contain Chinese elements, meaning Trump’s 10 cent “baseline” tax hike on all imports is meant to counter additional countries serving as conduits for Chinese goods.

In Project 2025, Peter Navarro emphasized the impact of non-tariff barriers like stringent safety standards, customs delays, and local content requirements on US exports. The US uses these, too, and in early February 2025, Trump cited fentanyl smuggling as justification for raising tariffs on China, Mexico and Canada.

Trump’s tariff increases and the resulting supply chain rerouting may prove challenging to reverse even if a more conventional president comes along. Critics question whether this transition can be fast, affordable or effective, but the Covid-19 pandemic proved supply chains can reorient under pressure relatively quickly, just as China showed its agility by setting up operations in Mexico during the 2020s.

Internal dangers

A tariff war will nonetheless raise prices for consumers and businesses, ending the era of cheap global goods that the US economy has depended on for decades.

Countries kept close ties to protect consumer access to the market and invested US dollars in American stocks, bonds, and real estate. Uncertainty over Trump’s policies saw a fake tweet about tariffs on April 7 trigger multi-trillion-dollar swings. Pensions, household wealth, and corporate valuations would be impacted by continued stock volatility or declines.

Some argue that if the stock markets crash, money could flow into and lower the price of US treasuries, reducing their prices and allowing the government to refinance long-term bonds with cheaper debt.

However, many traditional US debt holders may want concessions before continuing to finance it. Treasury yields have already risen, making new debt more expensive, and China, the second-largest holder of US debt, is suspected of shedding bonds to help do so.

China has also retaliated by enforcing its own tariffs and recently halting exports of some rare earths and essential minerals that are essential to modern technologies. Its state-backed firms can flood global markets with cheap goods and advanced tech, squeezing out competitors.

Beijing, which is increasingly present in international organizations and trade blocs, could become a more influential force in shaping global economic norms if these organizations and agreements become more fluid and the US steps back.

Trump also wants to devalue the dollar to make US exports more competitive, but insists on keeping the dollar as the world’s reserve currency, which eases access to cheap debt. Even if no obvious alternative has been found yet, his strategy is undermining global confidence in the dollar.

Trump’s pressure on a resistant Federal Reserve to cut interest rates further reflects limited borrowing options and coordination in US financial policy as he embarks on major economic upheaval.

Democrats have largely avoided serious opposition to Trump’s policies because they believe it may be a losing political strategy. Still, some top members like Chuck Schumer and Gavin Newsom have marked early opposition, along with seven GOP senators who recently voted against Trump’s Trade Review Act.

The US business class, which once viewed China as a promising market but now views it as a rival, has some backing for Trump’s policies. No longer limited to cheap goods, Chinese companies like Temu, Shein, and BYD increasingly threaten giants like Amazon and Tesla.

Any success in restoring manufacturing will largely come from automation rather than high-paying positions, which will benefit major US corporations. Still, decades of cooperation with China means that these businesses remain exposed, with major corporate figures expressing public concern and Elon Musk publicly criticizing Peter Navarro’s role in the tariff push.

Trump has since framed tariffs as a source of revenue to offset other taxes in addition to serving as leverage over trading partners. His 2024 campaign called for cutting the corporate tax rate to 15 %, down from 21 %, already lowered from 35 % during his first term.

However, the anticipated economic boom did not materialize before Covid-19 arrived, and his suggestion that personal income tax be replaced with tariff income is unlikely to produce enough money, even in the most optimistic scenario.

And while the US needs to expand production for both domestic use and exports, current capacity falls far short. While tariffs may encourage new habits in businesses and consumers, blanket protection without government initiatives in infrastructure development, skills training, and research and development risks doing more harm than good, leaving the private sector with little guidance.

Compared to Trump’s unpredictable approach, China and the EU have positioned themselves as stable anchors of the global economy. Due to tariffs and strained ties, US demands to coordinate with major economic allies like the EU and Japan to stifle trade with China, including limiting Chinese imports and preventing its companies from establishing themselves risk falling on deaf ears.

Global risks

A major pillar of global economic stability is also at risk as a result of restricting access to US consumers. The US accounted for roughly 13 % of global import consumption in 2023, acting as a safety valve for global overproduction by absorbing excess goods.

China has pledged to “vigorously boost domestic consumption,” as per the People’s Daily, to help replace American consumers, as it is facing a property crisis, high youth unemployment, and mounting local government debt.

However, its$ 300 billion trade surplus with the US demonstrates how dependent it is and has less room for retaliation. The EU has signaled it will not tolerate a flood of Chinese goods, as it, like the US, increasingly finds itself competing with China in high-end products.

The US has also experienced tariff increases from the EU and Canada. The Trump administration has tested EU unity by courting globalization-skeptic allies like Italy’s Prime Minister Giorgia Meloni, though tensions are likely to deepen before they ease.

The dangers of deindustrialization are being highlighted by Europe’s struggle to maintain support for Ukraine and Russia, a trend that the US is now trying to reverse systematically. And, by targeting allies with tariffs too, the US ensures that any self-inflicted economic pain is matched abroad, making the cost of reshaping trade a shared burden.

A escalating tariff conflict between Canada and China in 2025 is a surefire sign that China’s export-focused model will likely become even more vulnerable. As the US signals a reduced role in safeguarding global maritime trade, already strained by disruptions like Houthi attacks in the Red Sea and rising piracy, geopolitical tensions could disrupt other key routes. Free trade will have to increase shipping and insurance costs without US assistance.

Trump frequently changed tactics in his first term, mixing threats with negotiations. Voices like Kent Lassman’s in Project 2025, calling for a return to free trade, may gain traction if his tariff strategy falters.

But Trump has been warning of trade imbalances since the 1980s, when Japan and West Germany were his main targets. He seems determined to make China the centerpiece of his legacy by focusing on it this time.

Scrapping the old, in his view, unreformable system and embracing whatever follows is based on the belief that the US is best positioned to shape the new system. Which nations will support or be forced to do so at this point?

Whether a complete globalization teardown occurs or not, he appears ready to push as hard as possible within constraints. Dismantling Beijing’s advantages in global trade will not be simple, as evidenced by the fact that a large portion of MAGA’s products still are produced in China.

John P Ruehl is an Australian-American journalist living in Washington, DC and a world affairs correspondent for the Independent Media Institute.

He contributes to a number of foreign affairs publications, and his book,” Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas,” was published in December of 2022.

This article was produced by Economy for All, a project of the Independent Media Institute, and is republished with kind permission.

Continue Reading