Americans to pay dearly as Trump’s 'America First' tariff war hits global trade
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In April 2025, Donald Trump announced tariffs against most countries in the world. These are economically illiterate, and it is hard to find an expert who believes they will not be catastrophic. In his ignorance and arrogance, Trump rejects the received wisdom on the basis of no evidence at all. Trump is dim enough to think that foreign countries will pay them. However, if a Chinese manufacturer sells goods to US consumers, it is the US consumers who will pay the cost.
Some US businesses are reliant on importing raw materials and, in some cases, components from other countries. It will now be costlier for them to do so. Therefore, it will be more expensive for American consumers to purchase goods. Americans will also be forced to stop buying some items altogether. There was no need to do this. The US economy was doing very nicely. 20% of Americans are in relative poverty. They buy essentials and nothing else. Tariffs will hurt them the hardest.
Trump has not factored in the idea that the rest of the world will riposte. Dozens of other countries have already riposted with tariffs on US goods. This means American companies will sell fewer goods abroad because their goods are becoming unaffordable.
Why do countries trade with each other at all? It is because some countries can produce items that others cannot. Moreover, sometimes a country makes an item better and/or cheaper than the other. No country can achieve total autarky.
The White House’s idea is that as imports will be more expensive than before, Americans will buy American. That will sometimes be true. But Americans were buying foreign goods because they were cheaper or better or both. Americans will pay more for goods or buy those of inferior quality.
Trump introduced tariffs in his first term and removed them after a few months because of their harmful effects on the US economy. The Republican Party used to be the party of business. As capitalists, they recognised that free trade promoted prosperity.
The Republican Party is a Trump cult. Few dare criticise him there. They know that the Republican base is very MAGA (Make America Great Again). The MAGA Republicans are Trump’s blind loyal disciples. To speak out against the inanity and insanity of Trump’s pernicious policies and his blatant senile dementia is to invite de-selection if you are a Republican politician. But many Republican politicians are privately disquieted.
Hostility to free trade is one of the few issues on which Trump has been consistent. He opposed NAFTA (North American Free Trade Agreement) when it was formed in 1993 by President Clinton. Ross Perot of the Reform Party was also against it. NAFTA was a tremendous success. It contributed to 15 years of steady economic growth. American people and businesses were able to purchase goods and services cheaper than before and, in some cases, of higher quality. It also increased US access to the Canadian and Mexican markets. There were, of course, a few downsides. It accelerated the closure of US factories. US manufacturing had been in decline for decades as US companies outsourced manufacturing to countries with lower wages.
Working class whites who are churchgoers in the rural states are those most likely to vote for Trump. They are voting against their economic interests. Much of this is sheer stupidity. They will pay dearly for their idol’s hubris and xenophobia.
Tariffs are part of a broader theme of ‘America First’. This slogan is redolent of the America First Committee of the 1930s, which was about keeping the United States out of any European War. Trump subscribes to the groundless belief that everything American is automatically superior. Trump is trying to do this on a global scale. It is as though Trump’s motto is ‘lose friends and alienate people. ’
In 2024, Trump said the most beautiful word in the English language is ‘tariff. ’ That is the first time anyone has said that. Trump is not often original. Thinking tariff is the most beautiful word will disappoint those who favour something like ‘love’ or ‘truth’.
In his first term, Trump said, ‘trade wars are good and easy to win.’ Why did people not fight them all the time? Wars of any kind are seldom good. Trump did not cite a single example of a good trade war. As usual, his policy was based on gut instinct. There was no evidentiary basis for what he did. No impact assessment was done. It was all flying by the seat of the pants.
One of the few successes of Trump’s first term is that the stock market went up. But it almost always does. However, the stock market has reacted badly to it.
The European Union is an object of Trump’s loathing. He has slapped severe sanctions on goods from the EU.
The United Kingdom is one of the few countries to have had relatively moderate sanctions imposed on it. Nonetheless, the UK has responded by introducing sanctions on US imports.
The US economy is likely to experience a sharp contraction due to the trade wars. There will be less growth if not a recession. It may fuel inflation and unemployment. A bad economic outlook makes a Democrat victory in the 2026 midterms more probable. The midterms usually go against the party that holds the White House.
