Donald Trump announces high punitive tariffs for Canada, Mexico and China. If he gets serious about this, experts say there is a risk of a trade war with severe consequences.
US President-elect Donald Trump has announced that after taking office on January 20, he will impose tariffs of 25 percent on goods from Mexico and Canada and 10 percent on goods from China. These tariffs will remain in effect “until drugs, especially fentanyl, and illegal immigrants stop entering our country,” Trump wrote on his online platform Truth Social on Monday (local time). The tariff collection will be one of his first official acts.
Critics of this protectionist trade policy blamed Trump during his first term in office from 2017 to 2021 for causing massive economic damage to Americans by introducing high tariffs, for example on goods from China. Especially those whom Trump says he wants to help recover: the workers. His “Make America Great Again” movement promised during the election campaign that the “blue-collar workers”, i.e. ordinary employees and skilled workers, would have more money in their pockets again in a second Trump term.
However, economic experts already agreed in 2021 that Trump had had exactly the opposite effect with his rigid trade policy in his first term in office. The old and soon new US president is responsible for the loss of 250,000 jobs. In addition, the US trade deficit grew astronomically. The introduction of high trade tariffs would also make many products more expensive for Americans.
“Trump’s approach has done more harm to the US economy than it has benefited it,” wrote US finance professor Michael Pettis. “And that’s because this approach to trade policy is based on a completely outdated understanding of how trade works.”
Political observers therefore suspect that the 78-year-old former reality TV star may not be concerned so much with a balanced trade policy that is sustainable and for the benefit of the entire US population, but rather with something completely different: punishment and retaliation. and do so with as much public impact as possible.
During the election campaign, he repeatedly emphasized to his supporters that some European countries would have to pay to import their products into the USA. “They won’t take our cars, they won’t take our agricultural goods either. But they will sell millions of cars to us. No, no, no, no, they will pay a damn high price for it,” he said at an event in the industrially dominated state Pennsylvania.
As the Washington Post writes, countries other than Mexico, Canada and China could also be threatened with severe trade policy retaliation from the US government. According to the Post, “Europe’s worst nightmare” would then come true. The German Bundesbank President Joachim Nagel expects that if the Trump administration imposes tariffs of ten percent on German products, economic growth in this country will decline by around one percent. That would mean a severe shock to the already weakening economy.
Trump would wage war by other means
Apparently, Trump wants to put pressure on the governments of the affected countries with his announcements of high tariffs, write the experts at the Peterson Institute For International Economics (PIIE), an independent US think tank that specializes in economic research. Accordingly, the economic pressure from Washington would not only have an impact on economic policy, but also on other political areas of those states that the US President has declared war on. Trump is playing a “game of chicken”, i.e. a coward’s game, according to the PIIE. Like when two drivers race towards each other in a test of courage: whoever swerves first loses. Trump wants to impose his will on unwanted governments. The means to achieve this: high tariffs.
It could also affect Australia. Because Trump and his new government advisor Elon Musk are said to be angry about the announced ban on social networks for Australians under the age of 16, Australian and American experts are already fearing, according to the “Financial Review”, that the future US president could punish the country with high tariffs.
