Trump's Tariff Policy and Its Impact on Global

Trump's Tariff Policy and Its Impact on Global | Daily Tribune

“Every country is calling us. That’s the beauty of what we do. We put ourselves in the driver’s seat. If we would have asked these countries to do us a favor, they would have said no. Now they will do anything for us.”

US President Donald Trump told reporters this last week, just days after his “Liberation Day” tariff madness routed stock markets worldwide, stoking fears of a global trade war which in turn threatens to kill the global economy.

Outside of Trump’s unmistakable malignant narcissism, this indicates his apparent willingness to strike deals, belying uncertainties about his bad-math tariff scheme.

Which only means that whatever global economic disruptions there would be won’t be just about sanctions against countries or about protectionism or trade wars.

In spite of doubts that he has the personal capacity for such a devious scheme, Trump’s tariff barrage is more likely about restating America’s already outsized sphere of influence all over by creating economic chaos.

This, particularly since transactional Trump chose to dump last week 80 years of US neo-liberalist globalization policies, which not only made the US rich and powerful but also caused China’s rise.

Free trade-anchored globalization, however, has reached its tether, particularly after the US lost its major manufacturing capabilities to other countries.

Still, Trump promises that the troubled US can once again become rich and protect American manufacturing workers by waging trade wars on friends and foes alike.

Meanwhile, any expected haggling between Trump and other countries will eventually shape an emerging global economic system defined by protectionism, tensions, and transactions.

How Trump and his aides will work out this global-scale “protection racket,” economists and critics say, is by strong-arming countries into doing whatever the Trump administration wants economically and politically.

On our side of the pond, the bullying of countries into making concessions seems to have started.

Trump claimed last week, for instance, that To Lam, General Secretary of the Communist Party of Vietnam, told him that “Vietnam wants to cut their tariffs down to ZERO if they are able to make an agreement with the US.”

Manufacturing powerhouse Vietnam was hammered with a heart-thumping 46-percent levy.

Region specialists say many Southeast Asian countries suffered Trump’s full-throated tariff wrath likely because of their stronger trade ties with China.

The Philippines, however, escaped with a lower 17-percent levy, although this is still injurious to our prime exports of electronic parts and coconut oil to the US.

Nonetheless, as American economist Zoltan Pozar suggests, “Other countries would have to choose between helping fund a US ‘security zone’ or being excluded from it and funding it anyway through tariffs.”

The “security zone” option might be more familiar to us, especially with regard to our security complications with China.

Anyway, using the extraordinary power of the US economy seems to be closely tied to US security and defense issues.

US Treasury Secretary Scott Bessent, said one observer, spelled out this link when he recently argued for the US to set up tri-color “security zones” where tariffs are configured to a country’s attitude to the US.

In this case, there would be a “green zone” for those who share the same democratic values and defense interests as the US, a “red zone” for hostile countries, and a “yellow zone” for those who “grandstand” against the US policies but are not in the enemy camp.

We perhaps are in the “green zone,” considering the US is selling us F-16 warplanes.

Still to roll, however, are other consequential effects of Trump’s tariff blitzkrieg.

In the days ahead, tariff-hit countries are likely to respond with challenging combinations of retaliation, appeasement and diversification.

It will be turbulent for all for years to come, in short.