Trump's tariff tactics: Chaos and consequences in global trade
Since the 1980s, Donald Trump has viewed the United States as a victim of economic globalization, said Dr. Rafał Szymanowski from Adam Mickiewicz University in Poznan. According to the expert, the tariffs imposed by the U.S. president may not deliver the expected results.
In the initial months of Donald Trump's presidency, economic globalization experienced a slowdown, assessed Dr. Rafał Szymanowski from the Faculty of Political Science and Journalism at Adam Mickiewicz University in Poznan and the Poznan-based Institute for Western Affairs. He admitted, "What Trump announced and declared regarding international trade may provoke a revolution."
Regarding international trade, Trump has been very consistent and has considered the USA to be a victim of economic globalization since the 1980s. His primary argument is the U.S. trade deficit, particularly with the EU, which he blames for using unfair practices against the USA, he said.
He added that the tariffs imposed by the USA are intended as a tool of pressure in international policy, aimed at reducing the trade deficit and encouraging companies to reinvest in production in the United States.
"A lot of chaos"
The scientist emphasized that, currently, there is a lot of chaos in U.S. trade policy. "Trump initially announced a 25% tariff on products from Canada and Mexico, and then he suspended it. It's basically unclear why, because he didn't get much aside from promises. However, the announcement of a 25% tariff on European goods, such as pharmaceuticals and cars, could severely impact major EU countries like Germany and France," he noted.
The researcher recalled that during his first presidency, Trump also imposed tariffs. "He did it to improve the U.S. trade balance. In the case of relations with China, he didn't succeed. Between 2016 and 2019, the U.S.-China trade deficit decreased from 310 billion dollars to 308 billion dollars. Those tariffs didn't achieve anything. Later, in 2020, the deficit shrank, but that was due to the COVID-19 pandemic and the disruption of supply chains. The tariffs didn't achieve what Trump declared he wanted," he noted.
No chance of success
The scientist added that all econometric models indicate that Trump's idea of compensating for reduced tax revenues with higher tariffs has no chance of success. "There is a great risk that the cost of tariffs will actually be borne by American consumers, who will pay more," he indicated.
Since the end of World War II, tariffs have generally been declining globally, he noted.
He added that in the event of a trade war between the EU and the USA, Europe could economically align more closely with Canada. In his opinion, the free trade agreement between the EU and South American countries associated with Mercosur will not fully compensate for the losses in the American market.
The researcher denied that Trump's policy could quickly lead to a resurgence of major industry in the USA. "Closing a large factory of one of the major global corporations can take 3-4 years. You can't close a factory in one day, and opening a new one in a different location means finding a place, negotiating a price for the land, building the facility, and finding staff - this all takes time," he said.
He added that the alleged decline of industry in the USA is not solely due to international trade and globalization but also results from technological progress and reduced employment needs while maintaining a similar scale of production.
Dr. Szymanowski pointed out that there are currently no signals suggesting that U.S. trade moves could cause a global recession. He added that paradoxically, with Trump's new term, European stock exchanges have gained, which may be perceived by investors as more stable markets.
