Trump’s tariff tantrums

US President Donald Trump announced 25 per cent tariffs on foreign steel and aluminum imports on February 10, doubling down on his protectionist agenda to ‘boost’ the US economy through import taxes, a move that could disrupt trade with key partners.

Set to take effect on March 4, the tariffs will impact the 25 million tons of steel the US imports annually. This follows a White House decision to delay tariffs on Canada and Mexico, two of the largest steel exporters alongside Brazil and South Korea. The move marks another step in Trump’s aggressive trade policy, coming just days after the administration imposed a sweeping 10 per cent tariff on Chinese imports, escalating tensions with global trade partners.

The policy enforces tariffs “without exceptions or exemptions”, ending carve-outs previously granted to certain nations and raising aluminum duty rates. This mirrors Trump’s 2018 tariffs during his first term, which triggered global retaliation. By rejecting multilateral trade norms, the move risks escalating trade disputes while prioritising economic nationalism over diplomatic engagement, despite warnings of market disruptions and strained international relations.

Trump has also hinted at reciprocal tariffs on countries imposing duties on US imports, though specifics on exemptions or targeted nations remain unclear: “If they charge us, we charge them”. Given that Canada, Brazil, Mexico and South Korea are major steel and aluminum sources, the policy may worsen critical trade ties and increase international trade tensions.

Fears of a perfect storm in world trade have already been triggered by President Donald Trump’s announcement of wide-ranging tariffs on products from Mexico, Canada, and China. Enacting executive authority to tackle the ‘major threat’ of illegal immigration and drug trafficking – including fentanyl – Trump imposed 25 per cent tariffs on goods from Canada and Mexico as well as 10 per cent on Chinese imports. He also promised trade restrictions on European goods and intends to introduce ‘reciprocal tariffs’ on other nations very soon. Historically, Trump has always argued that focusing on countries having trade surpluses against the US would boost the American economy and even mentions tariffs as a possible substitute to income tax.

Once more on display is President Donald Trump’s blatant support of a protectionist economic plan as he justified tariffs even while confessing their ability to cause economic damage on the US and calling it a required price. America’s three biggest trading partners – China, Mexico and Canada – reacted immediately. While China imposed countermeasures aimed at US exports including crude oil, LPG, and farm machinery, Canada and Mexico reacted with punitive tariffs. Beijing has also started a Google antitrust investigation as well as indicated it was going to oppose the US at the World Trade Organization (WTO).

Investors in Asia and Europe are preparing themselves for the consequences of an escalating trade conflict – so the worldwide markets crashed immediately, with stocks falling everywhere. The interruption of global supply networks and worries of lasting financial instability highlight the wide-ranging effects of Trump’s tariff-based approach on the international economic system.

Rooted deep in a 19th-century mercantilist worldview, President Donald Trump’s trade approach emphasises protectionism and the aggressive application of tariffs as main policy instruments. Trump sees tariffs as serving as leverage in talks to get beneficent contracts. This strategy assumes that tariffs are either ‘costless’ – that is to say overlooking their effects on consumers through increased prices and on businesses via disrupted supply lines – or that the accompanying economic suffering justifies the more generalised aim of reinvigorating American industry.

Today’s interdependent world economy, however, presents great risks with this resurgence of protectionism. It is set to upset international trade relationships, slow economic growth, and damage the institutional structures that have guided worldwide commerce for many years. Trump’s tariff-based plan is a risky gamble with great consequences for the US and its trading partners.

Far from providing the unilateral advantages he contends, Trump’s tariff war will exact a great cost on the American economy. Given that rising business expenses are passed on to consumers, the most immediate outcome would be accelerated inflation – a sharp contrast to Trump’s pledge to control rising costs. Greater tariffs will interrupt global supply chains stifling growth and investment, lowering borrowing costs, and even hurting US exports.

The measures are predicted to particularly hit hard leading industries such agriculture and the automobile sector. Trade associations for these sectors as well as consumer goods manufacturers are already predicting the inflationary forces customs will unleash. Should Trump expand this tariff conflict to Europe, the financial consequences for the US would amplify, therefore lowering growth and aggravating internal issues. Far from what Trump claims, the expenses of this protectionist approach more than exceed any advantages seen.

History shows clearly how Trump’s trade initiatives faltered. Under the pretense of lowering the US trade deficit, he started a trade war with China during his first term by means of $400 billion in tariffs. Still, six years later – even as President Biden went on with protectionism – the deficit has hardly shifted. Factually speaking, this trade war was never really about the deficit; it is more a general US policy to restrain the ascent of China. Trade restrictions and attempts to limit China’s access to sophisticated technologies, notably semiconductors and AI development, have been part of this plan.

The US has been trying everything to slow down China’s economic rise. The rise and reaction to DeepSeek is a telling case in point. This episode not only showcases China’s resilience but also reveals the weaknesses of American attempts to block its technological and economic advancement.

The ultimate outcomes of Trump’s tariff policies may remain uncertain, but one consequence is undeniable: the US is steadily dismantling the rule-based international order established after World War II, a system anchored in free trade and globalisation.

By withdrawing from international treaties and organisations and doubling down on protectionism, the US is undermining the very framework that has sustained global stability. This shift risks creating greater chaos and instability at both global and regional levels.

A transactional approach to trade wars also alienates allies and will fail to significantly curb China’s rise, while simultaneously destabilising the global economic order. In pursuing short-term gains, the US risks long-term damage to its interests and the foundations of the international system it once championed.