Trump바카라�s Tariffs: Liberation for Whom?

In his characteristic style, President Donald Trump has proclaimed April 2 as 바카라�Liberation Day바카라� and as 바카라�the day American industry was reborn바카라�, as he announced a 10 per cent 바카라�minimum baseline tariff 바카라�on all imports to the US to take effect from April 5. Neither American allies nor rivals have been spared from the tariff hikes, with Trump explicitly calling both out in his speech.

바카라�For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike바카라�. In addition to these tariffs, he also announced 바카라�individualised바카라� tariffs on countries with the largest trade deficits with the US, scheduled to come into effect on April 9. Instead of total 바카라�reciprocity바카라�, these 바카라�individualised tariffs바카라� have apparently been calculated by considering half of what these countries charge American exports. 

Throughout his presidential campaign, Trump had talked about reducing the US바카라� trade deficit which stood at around $1.2 trillion in 2024. In 2024, the US had trade deficits with more than a .  So, much of Trump바카라�s angry rhetoric during the Presidential campaign was against foreign countries, which according to him, have been exploiting the US economy by imposing tariffs on American goods while benefiting from low American tariffs. He has argued that lower tariffs have harmed the US economically, leading to loss of American jobs and inhibiting manufacturing in the US, with adverse consequences for the US바카라� security. In his view, 바카라�a nation바카라�s ability to produce domestically is the bedrock of its national and economic security바카라�. 

The only way to hit back at these countries, according to Trump, is to impose high tariffs on them. Moreover, if imported goods become expensive because of tariffs, American consumers will be forced to buy American-made goods, promoting the American economy and increasing the amount of tax raised in the country.

So, these latest round of tariffs should not surprise anyone. While many economists argue that the economic logic behind these tariffs is flawed, contending that it could lead to inflation and recession, it is a populist rhetoric which has resonated well enough for American voters to give Trump both the popular and electoral college votes as well as control over the Congress. 

Southeast Asian countries like Vietnam and Cambodia have been hit with the highest tariff rates. India is mentioned five times in the Executive Order on tariffs for its high tariffs on passenger vehicle imports, network switches and routers, rice in the husk and apples. During his speech, Trump mentioned his friendship with Prime Minister Modi but went on to announce 26 per cent tariffs on Indian exports. India바카라�s exports to the US are just about 2.2 per cent of its GDP. So, the impact of Trump바카라�s tariffs on India is likely to be limited. Moreover, even before these tariffs were announced, India had scrambled to reduce tariffs on American goods and has agreed to the Terms of Reference for a Bilateral Trade Agreement with the US.

There are two ways other countries could respond to these tariffs. The first is for them to also increase tariffs on American goods. The EU and China have already introduced tariffs on American goods. The other would be to reduce tariffs on American goods in the hope that the US would reciprocate by lowering tariffs on their goods. India, for instance, is attempting to use this option.  

It is unclear whether Trump will pursue this tariff policy till the end of his term. After all, he has a history of using tariffs to negotiate with countries. During his first term, Trump used tariffs to negotiate the US-China Phase One trade deal. Moreover, even in his second term, Trump has delayed or scrapped some of the tariffs he announced lie 50 per cent tariffs on steel and aluminium tariffs from Canada. But the key test of whether these tariffs will sustain or will be reduced will be the mid-term elections in 2026. If the tariffs lead to inflation for American consumers, they will vote against the Republicans, and this will perhaps force Trump to pause.