Tariff War Kills Trade
US President Donald Trump promised an all-out tariff war on about 60 US trade partners, ranging from 11 to 104 percent. The recent wave took effect on Wednesday, April 9, 2025.
But later in the day, President Trump reduced the tariffs to 10 percent for three months, except for China.
Trump hit China with a 104 percent tariff rate, and China answered by raising import duties to 84 percent on American goods.
Trump said imposing high tariffs is a tool to negotiate a fair trading deal for the United States, while China said it is willing to fight.
Markets across the globe have lost trillions of dollars since last week, according to the BBC online, and fear of a worldwide recession looms.
According to the BBC online, President Trump said he knows what he is doing and that countries are “dying to make a deal.”
But Americans fear an increase in prices at a time when inflation is still higher than usual, and many are predicting a recession if the tariff war drags on.
The tariff war between the largest two economies in the world is heating up. President Trump imposed a 20 percent levy early this on China, followed by a 34 percent increase last week, and pushed tariffs to 104 percent this week, hoping to bring China to the negotiating table.
China, in return, raised its tariffs on American goods from 34 percent to 84 percent and accused Trump of behaving like a bully.
Tariffs never work. They disrupt free commerce and trade and create enemies rather than friends. However, some countries, including the United States, have used them to level the playing field.
The issue here is not what President Trump is doing; It is how he is doing. Countries use diplomatic channels and negotiations over time to resolve their problems, whether they are economic, territorial, or military.
While President Trump may be successful in pushing around Arab countries because their leaders depend on American protection, his tactics may not work with established economies such as Europe and China. A good example is Canada, where the current 25% duties on steel and aluminum, energy resources, and autos could threaten American energy future and economic growth.
The late President Ronald Regan did not like tariffs, describing it as “a quick political advantage, but short-sighted.” He said tariffs cost American jobs, trigger economic wars, and sometimes cause businesses to depend on the government to solve their issues. He also said that if people stop buying, markets shrink and collapse, businesses and industries shut down, and millions lose their jobs. High tariffs are bad for the economy and bad for the people.
There may be a case for renegotiating economic ties with different countries, but imposing tariffs on countries that do business with the US to force them to buy more goods from America is not a good strategy. Also, playing games with the tariffs on and off adds insecurity to a jittery world market.
In addition, many countries wish to be self-sufficient and produce their own goods, but in today’s world, markets are intertwined, and many American manufacturing are outside the country because of cheap labor and loose environmental regulations. Yes, tariffs could force some businesses to return manufacturing to the United States, but such a return would require years, time consumers do not have.
President Trump seems adamant about using tariffs as a negotiation tool. We favor free trade, no tariffs and healthy competition, and we hope he succeeds quickly or changes his mind. Otherwise, World War III (economically) will be very costly for all of us. And for sure, we do not need to dip into a recession.
