What Is Going on with the Trump Administration's Tariff Policies and Trade War with the World?

As quickly as President Donald Trump announced his “reciprocal tariffs” for “Liberation Day,” he paused them, except for those on China. Initially, ninety countries/territories faced anywhere from ten to fifty percent hikes, including the uninhabited Heard and McDonald Islands (Australian territories where there are penguins but no humans), Svalbard and Jan Mayen (the Norwegian territory of Jan Mayen is uninhabited, and Svalbard’s 3,000 polar bears outnumber the human population), and the British Indian Ocean Territory (these islands are only inhabited by American and British military personnel, largely because the United States and United Kingdom forcibly removed the native population of Diego Garcia to Mauritius and the Seychelles in order to build a military base). Imposing these new taxes on American businesses, and ultimately citizens, was justified based off of the International Emergency Economic Powers Act of 1977, which ultimately originated from the World War I-era Trading with the Enemy Act of 1917, and these dictatorial orders that bypass Congress will have consequences for everyone if they do resume in the weeks to come.

Anyone who has read my work previously may have picked up on the idea that I do not find it convincing that governors, bureaucrats, and presidents should be able to find some old law passed decades prior and expand on it in the modern day to essentially legislate through executive fiat. In this case, a law passed in 1917 (and reaffirmed in 1977) when the United States was involved in a world war (and then Cold War I) should hardly have any bearing on a situation today where there is no discernable emergency for the Trump administration to declare. Yes, there are trade deficits, but most of that is simply because the United States has the reserve currency of the world (dominating nations through its economic policies), allowing Americans to consume way more than they produce. Of course, if you stop manufacturing goods domestically, you rely on foreign goods imported from other countries. That is just simple logic, and if you can justify an emergency based on that, it appears that it is more of a power grab than it is policy grounded in sound constitutional or economic principles. Recall that the tariff emergency declaration was originally because of fentanyl and illegal immigrants pouring into the United States from Canada and Mexico, but it evolved into punishing the entire world for providing Americans with cheap goods so that they do not have to focus on getting their hands dirty with the actual creation of products in American cities. What will the Trump administration announce an emergency for next?

Do not get me wrong. I would like to see manufacturing come back to the United States and Americans able to buy domestically-made products more easily, but you cannot impose tariffs on cheap foreign goods this quickly without causing a price hike, as the manufacturing base in the United States just simply does not exist at this time. Just as increasing minimum wage or regulations causes businesses to push those added costs onto the consumer (they will only eat a certain amount of it out of their profits), tariffs, which are tax hikes, have the same effect and will increase the prices that average Americans pay at the counter (remember that the American colonists rebelled over a small increase in taxes, and today, Americans cheer them on when they are applied to whatever issue that favors their agenda, whether it is protecting American industry or stealing hard-earned money from the wealthy). Now, if we eliminated the federal income tax, tariffs would be an acceptable method of taxation, as those with more money to buy products would pay higher taxes, while those who consume less would pay less. Americans would ultimately keep more of their money and choose when they wanted to pay taxes based off of their spending practices and lifestyles. The United States used to rely on tariffs for taxation before the income tax existed, but it is not sustainable to implement both a large-scale income tax and high tariffs.

Initially and prior to the pause, President Trump’s tariffs included: a 34% increase on China (on top of the 20% that had already been added), 50% on Lesotho, 49% on Cambodia, 47% on Madagascar, 46% on Vietnam, 44% on Myanmar and Sri Lanka, 41% on the Falkland Islands and Syria, 40% on Mauritius, 39% on Iraq, 37% on Liechtenstein and Bangladesh, 36% on Thailand, 32% on Taiwan, Fiji, and Indonesia, 31% on Moldova, 26% on India, 25% on South Korea, 24% on Japan, 20% on the European Union, and 10% on the United Kingdom, Dominican Republic, Chile, St. Lucia, Aruba, Curacao, and many others (this is just a few select countries, and the actual list is much larger). At first glance, it may seem arbitrary, and in many ways it is, but the official formula was calculated as the trade deficit with “x” country, divided by the value of the exports, multiplied by half (ten percent was the base, and any country that exceeded that using the calculation would receive a number greater than ten). Although these reciprocal tariffs were paused for ninety days, as of right now, the 25% tariff on foreign-made vehicles remains, and until compliance with economic agreements are meet, the 25% tariff on most goods imported from Canada and Mexico will also stay (as I wrote previously, there is a trade deficit with Canada, and Ottawa imposes high tariffs on certain products, such as those related to the dairy industry, but overall, the trade imbalance is largely overexaggerated). The ten percent baseline tariff on all imported goods is expected to remain in place (though, who knows what will actually happen). What exactly will this neomercantilism policy accomplish (predating and rivaling Adam Smith’s capitalism, mercantilism was the economic system whereby imperial nations measured their economic wealth based on increasing exports and decreasing imports, as well as accumulating gold and silver through any means)?

The tariff on China was raised to 104% before China retaliated, and then to 125%, and then, after China raised its tariffs on American-made goods to 84%, the Trump administration’s increase jumped to 145%, leading China to reciprocate to 125% (President Trump indicated that some Chinese products could end up being subject to a 245% tariff after every aspect is considered). This trade war will hit California the hardest, as it exports $3,403,000,000 in computer and electronic products, $2,769,000,000 in machinery, $1,652,000,000 in chemicals, $1,238,000,000 in agricultural products (particularly almonds, dairy products, pistachios, and wine), and $1,090,000,000 in processed food. All-in-all, the state exported $15 billion worth of products to China in 2024, while it imported $172 billion. California is a radical example, as it has the largest economy in the United States, but this trade war will affect all Americans in some way.

In the interim, companies may have raced to import Chinese goods or export goods to the United States to beat out the tariffs, but this can only last so long, and the decline in imports from and exports to China will only decrease in time. Probably one of the most negative trade policies resulting from the tariffs will be those involving rare-earth minerals, especially given that China mines and refines 80% of the global supply (including 90% of the world’s rare-earth magnets), and with China imposing restrictions on these in response to President Trump’s tariffs, producing civilian and military technology (such as smartphones, automobiles, submarines, fighter jets, warships, tanks, and missiles) will become increasingly difficult (after the Pentagon’s reserves of rare-earth minerals run out, the United States will be forced to go crawling back to China’s arms or find new but expensive ways to mine the materials itself). Interestingly, this seems like the plot of the 2012 videogame Call of Duty: Black Ops II, where China cuts off rare-earth materials to the United States in none other than the year 2025, thus sparking a cyberwar between the two countries (is it just a coincidence that this “prophecy” is being fulfilled in the same year that the game made over a decade ago occurs?). Will Americans be propagandized into rallying around a hot war (or at least a cyberwar) with China?

With global tariffs, not only will Americans face higher prices (again, the United States consumes more than it produces, so with the opportunity to import cheaper foreign goods gone, the price of everything that would have been imported from China or others will likely skyrocket), but the stock market has responded as well (including with the discarding of bonds). The global market took a nosedive after the announcement of President Trump’s reciprocal tariffs, and as soon as these taxes were paused, the market began to recover, indicating that a recession or economic catastrophe could ensue if the United States’ trade war with the rest of the world continues (the president paused the tariffs partially because of the response from the stock market). None of this will be good for Americans in the short-term, and unless the Trump administration, which will be in office for only the next four years (not even), has a way to secure policies in the long-term, these tariffs will likely just cause more of a headache than they will solve anything.

Between now and the next three months, countries must quickly contact the president and ask for better trade practices to avoid rate hikes. In fact, so far, the United Kingdom, Vietnam, Taiwan, India, Argentina, Israel, Bangladesh, Cambodia, Indonesia, Lesotho, Thailand, and Japan have been willing to consider negotiations to address the trade imbalances. It is unknown whether the pause in the tariffs will be unfrozen or get extended, and it appears that the reason for the Trump administration’s bullying is to get countries to respect the power of the United States. In the long-term, this could provide the United States with a pathway to exit the global market and set on a road down gaining a manufacturing base as an independent nation, as opposed to an empire dependent on securing the industry of others. Engaging in fair trade with other nations while not utilizing economic or military power to subdue other nations or align with weaker nations to confront stronger ones would go a long way in stripping power from the American Empire and returning the country to the republic under which it was founded. However, given the Trump administration’s seeming loyalty to large corporations (just look at BlackRock’s acquisition deal for the Panama Canal) and the Israeli government, it is difficult to believe that that is actually what is being planned. In fact, Senator Adam Schiff is asking for a congressional investigation into whether President Trump purposely announced tariffs to tank the stock market and then paused them to increase stock prices, thus allowing his billionaire buddies to profit. Could these tariff policies really be an insider-trading scheme?

What will end up happening in the trade war between the United States and the rest of the world, and particularly China, is anyone’s guess, but what is guaranteed is that none of this will be good for Americans in the interim. Prices will only increase, and tensions with other nations will be on the rise (this is even hurting relations with Canada). Perhaps this will reach a plateau in time, and the United States can emerge as an important player in global trade without using leverage and power to bully other nations. A noninterventionist policy would be beneficial in the long-term, but the short-term pains would be realized by this generation. All empires must fall eventually, and could it be that the Trump administration is steering the American Empire toward a graceful demise that will not result in a total collapse, thus bringing the United States back to nationhood and away from imperialism? Or, is there some other globalist agenda or hot war with China in mind, or is this being done randomly and for no reason at all except to boost the ego of the current emperor?

Thank you for reading, and please check out my book, The Global Bully, and website.