M A Hossain,
Donald Trump’s decision to suspend most of his proposed “reciprocal” tariffs—save for those aimed at China—was not a clever recalibration. It was a reluctant concession to economic reality. What he initially billed as a bold protectionist strategy has unraveled into a belated acknowledgment that trade wars, far from being easy to win, are devastatingly expensive to fight—especially when you’re waging them against friends and foes alike. The damage of his original plan would have been catastrophic, and even the diluted version he now proposes will leave scars.
Consider the data. Economic modeling suggested that if the full tariff plan had gone into effect—blanketing nearly all imports with steep duties and triggering sweeping retaliation from trading partners—U.S. real consumption would have fallen by 2.4% in 2025, GDP would have contracted by 2.6%, and employment would have dropped by 2.7%. For an economy operating at near-full employment, that would mean millions of jobs suddenly vanish. What begins with a modest 4.2% unemployment rate could quickly spiral into something far more painful.
Nor would the pain have been temporary. Over a 15-year horizon, the economic effects compound: investment dries up, productivity slows, and real incomes stagnate. Tariffs don’t revive American manufacturing—they hollow out the economy from the inside. The fantasy that high tariffs could somehow resurrect an imagined industrial golden age is just that: a fantasy. What they actually do is erode the very economic power that made America influential in the first place.
The scaled-down version of Trump’s plan—essentially a 10% blanket tariff on most imports while China remains saddled with a whopping 125%—is marginally less apocalyptic but still injurious. The revised numbers still project a 1.9% drop in consumption next year, a 4.8% decline in investment, and a 2.1% fall in employment. None of this counts as good news, and it doesn’t qualify as a sound policy. What’s more, the structure of these tariffs remains fundamentally incoherent.
Start with the basics: many of the goods targeted by tariffs—minerals, coffee, bananas—are items the U.S. simply doesn’t produce. Taxing them does nothing to boost domestic manufacturing. All it does is raise costs for ordinary consumers. And when it comes to the industries America might try to reshore, the logic collapses under its own weight. Low-wage, labor-intensive manufacturing isn’t coming back, nor should we want it to. The objective of modern economic policy ought to be creating high-wage, high-skill jobs—not reopening sweatshops.
Moreover, protectionist volatility is poisonous for long-term investment. Businesses don’t allocate capital or build factories when they suspect trade policy will be upended with every presidential tweet. Trump’s inconsistency undermines the very confidence his tariffs are supposed to inspire. And retaliation is never just a threat; it’s a certainty. American farmers, already weary from earlier trade skirmishes, are likely to find themselves once again on the front lines, facing tariffs from countries that used to be reliable buyers of U.S. produce.
Modern supply chains are another sticking point. An iPhone isn't manufactured in a single country—it’s the product of components from around 40. A Ford F-150 isn’t just American steel and rubber; it depends on intricate contributions from a dozen countries. Rebuilding these supply chains domestically is a task that spans decades, not election cycles. And it isn’t simply a matter of political will or patriotic desire. It’s a matter of physics, finance, and global logistics.
Then there’s the legal question. The emergency powers Trump cites as justification for these sweeping tariffs were never intended to authorize broad economic warfare. His maneuvering stretches the law to its limits—possibly past them. Even if factories do come back under the weight of protectionism, they won’t be populated by battalions of workers. They’ll be filled with robots and run by engineers. The new plants that rise will be highly automated, offering employment mostly to skilled labor that remains in short supply.
Equally baffling is the decision to hit U.S. allies with these tariffs. Why slap a 10% duty on goods from countries like the United Kingdom or Australia—nations with whom the U.S. actually runs trade surpluses? That’s not just economic folly; it’s strategic self-sabotage. Trade deficits are not, as Trump insists, signs of national weakness. They often shrink during recessions—a fact that no economist considers a win. The focus on “reciprocity” in tariffs, as defined by balance-of-payments metrics rather than product-by-product analysis, reveals an understanding of trade rooted more in emotion than in economics.
One of the most inexplicable parts of Trump’s tariff vision is the exemption he granted to Russia. In a bizarre twist, Moscow is spared the punitive duties that are being leveled at longstanding allies. This is not only diplomatically mystifying—it also opens the U.S. up to accusations of arbitrariness and capriciousness in trade enforcement. Compounding the issue is the method used to calculate the tariffs in the first place: a reliance on a single year’s trade data rather than multi-year averages. That kind of cherry-picking distorts reality and breeds bad policy.
Trump’s approach also runs afoul of global trade agreements. By flouting the World Trade Organization’s rules, Washington not only undermines its legal obligations but also chips away at the very institutions that have helped maintain global economic order for decades. Foreign investors, watching this spectacle unfold, may start to lose faith in the stability of the U.S. market—and in the dollar as the world’s reserve currency.
This matters because when America pulls back, other powers step in. If European and Asian nations find themselves frozen out of U.S. markets or alienated by its erratic behavior, they won’t stop trading. They’ll just trade more—with China. Tariffs meant to contain Beijing’s influence could have the perverse effect of pushing Washington’s allies into its arms.
To be sure, confronting China is a necessary task. But the tools must match the target. A narrow set of tariffs tied to clearly defined goals—intellectual property theft, forced tech transfers, state-backed subsidies—could be part of a coherent response. But this requires diplomacy, coordination, and the patient building of alliances. Instead, Trump’s tariff tantrum alienates the very partners we need while failing to exact real concessions from Beijing. China, for its part, has already imposed retaliatory tariffs on 84% of U.S. goods, hammering American exporters while remaining largely unbothered at home.
What’s left is a set of policies that act more as self-inflicted wounds than geopolitical leverage. Tariffs are, at their core, taxes on American consumers. They raise prices, stifle growth, invite retribution, and diminish U.S. global influence. That Trump himself has stepped back—at least partially—from the abyss suggests even he understands their costs. And yet, he clings to the remains of his plan, either out of pride or political calculus, both of which are poor substitutes for sound economics.
There is a better way. Economic nationalism is a dead-end street. The United States should be spearheading a global effort to modernize trade rules, one that holds China accountable while reaffirming the alliances that made America prosperous. If Trump refuses to learn that lesson, the responsibility will fall on the next administration. And the sooner, the better.
This article published at :
1. Eurasia Review, USA : 12 April, 25
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