WASHINGTON:
Former US President Donald Trump’s aggressive use of tariffs as a strategic tool to secure economic and political concessions could significantly alter global trade dynamics, experts suggest.
Since taking office, Trump has repeatedly leveraged tariffs to address issues beyond trade, including immigration policies and drug control measures. His approach has led to fluctuating tariff policies, with initial blanket duties on Canadian and Mexican goods being paused, while import levies on Chinese products were simultaneously increased, prompting countermeasures.
On Monday, Trump announced broad tariffs on steel and aluminum, reminiscent of his first-term trade policies. Analysts warn that his tariff-driven strategy is creating unprecedented uncertainty in global trade.
“Trade policy uncertainty has surged dramatically,” said Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics. He noted that while economists can traditionally predict tariffs based on market factors, Trump’s use of trade measures for political leverage makes forecasting difficult.
This approach could disrupt global supply chains, potentially driving countries to reduce dependence on the US market due to heightened risks.
Expanded Tariff Strategy
Trump’s current tariff threats surpass those of his previous tenure. While his earlier presidency saw sweeping duties on steel, aluminum, and Chinese imports, his latest rhetoric targets nearly all US trading partners.
Pledging “reciprocal tariffs” to counter foreign duties on American goods, Trump has ordered a review of US trade deficits, with recommendations expected by April 1. If implemented, broad tariff measures could impact over $3 trillion in imported goods.
However, the justification for levies on Canada, Mexico, and even reduced additional tariffs on China extends beyond trade alone.
“This isn’t just about tariffs; it’s a move driven by domestic policy,” said Howard Lutnick, Trump’s nominee for commerce secretary, during a recent congressional hearing.
A Tactical Negotiation Tool
Christine McDaniel, a senior research fellow at the Mercatus Center, emphasized that Trump has long viewed tariffs as a central component of his strategy.
“He’s been clear about seeing tariffs as a key tool,” said McDaniel, a former official in the George W. Bush administration. “For him, they are both a negotiating tactic and a way to address trade imbalances.”
Stephen Moore, a longtime economic advisor to Trump, echoed this sentiment, suggesting that tariffs serve as a means to pressure other nations into aligning with US interests. He argued that trading partners such as Canada, Mexico, and China stand to lose more economically than the United States if they do not comply with Trump’s demands.
As Trump continues to shape his trade agenda, the global economic landscape faces potential upheaval, with nations reassessing their reliance on the US market and preparing for an era of increased protectionism.
