Trump's Worldwide Tariff Strategy: A Self-Inflicted Economic Catastrophe
March 6, 2025•1,111 words
"Thanks to economists, all of us, from the days of Adam Smith and before right down to the present, tariffs are perhaps one tenth of one percent lower than they otherwise would have been. And because of our efforts, we have earned our salaries ten-thousand fold." ~ Milton Friedman
"Tariffs that save jobs in the steel industry mean higher steel prices, which in turn means fewer sales of American steel products around the world and losses of far more jobs than are saved." ~ Thomas Sowell
"As history has repeatedly proven, one trade tariff begets another, then another - until you've got a full-blown trade war. No one ever wins, and consumers always get screwed." ~ Mark McKinnon
"What protectionism teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war." ~ Henry George
"Tariff policy beneficiaries are always visible, but its victims are mostly invisible. Politicians love this. The reason is simple: The beneficiaries know for whom to cast their ballots, and the victims don't know whom to blame for their calamity." ~ Walter E. Williams
"Protectionism is a misnomer. The only people protected by tariffs, quotas and trade restrictions are those engaged in uneconomic and wasteful activity. Free trade is the only philosophy compatible with international peace and prosperity." ~ Walter Block
On the big stage of global power, empires fall and rise not by chance, but by the actions of those in power. America's Empire, of economic dominance and global influence, is now headed towards its own demise. The catalyst? A defective policy of trade wars and tariffs, a move veiled in the cloak of protection but one that is certain to dismantle the very fabric of its hegemony. Trump's story is one about abuse of executive power and the price of isolation.
When America, a country as great, imposes tariffs on its trade allies, it's not a display of strength but a call of war against the global interdependent economies.
The response is rapid and inevitable. China, European Union, Canada, Mexico, India, Brazil, African countries, etc., all significant economies strike back in the same manner with their tariffs. American companies, multinational corporations that have operations across global markets, watch helplessly as their sales disappear. The same markets that had fuelled them to growth in the past now turn their backs, leaving them without a paddle in a sea of diminishing returns.
The global economy of today is built on the fragile web of global supply chains.
American industries, from automakers to computer manufacturers, operate on foreign-made components. Tariffs, those blunt instruments of economic policy, drive up the cost of raw materials, steel, aluminum, computer chips, vehicle parts, and American products are more costly and less competitive in the marketplace. In fact, Ford and GM engine parts, pass through multiple times all three countries Canada, USA, and Mexico eventually with the finished product at a cost effective speed efficient pace due to raw materials being used for specific components. With these Trump tariffs, costs will skyrocket and the supply chain management will slowdown due to tariff regulations and border checking parts to tariff. Factories, unable to withstand rising costs, close their doors and throw the crew overboard. The promise of job creation is lost, to be replaced by the spectre of ugly unemployment and economic despair.
But the hurt does not stop at the manufacturing facilities. Struggling to stay in business, companies pass on the burden of higher imports to consumers. The prices of foodstuffs, cars, and electronics skyrocket, igniting a firestorm that consumes purchasing power and stretches family budgets to the limit. Wages are stagnant, and real incomes of American workers decline, eroding the foundation of the middle class, causing more economic stress on the nation due to lack of a tax revenue base for needed health care, education, and social programs. The doubt and disarray of a worldwide tariff war send the share market into free fall, as financial specialists abandon a quest for more secure raw materials and resources. Huge organizations like Apple, Boeing, Tesla, Ford, General Motors, Chrysler, watch their benefits nosedive, setting off gigantic sell-offs that erase billions, even trillions, from retirement funds.
As businesses lay off employees in reaction to diminished demand and higher prices, unemployment explodes.
Consumer spending, the lifeblood of economic growth, grinds to a halt, further shrinking the economy. The Federal Reserve, responsible for maintaining stability, must raise interest rates to keep inflation in check, raising the price of borrowing and further accelerating the economic meltdown. What began as a recession becomes a depression, an economic black hole from which it seems there is no return. Many unemployed with no employment insurance, and no job opportunities, turn to crime to survive.
In this new world order, former American economic allies/countries forge new economic blocs that push America aside and sap the global strength of America.
The United States dollar, weakens, and with it goes the rise in imports costs as well as an increased bout of inflation. Foreign capital, that priceless injection of confidence and funds, melts away as people worldwide lose confidence in America's fragile chaotic economic system and Its illiberal politics under the Trump Administration. The American empire, once a sign of prosperity and power, stands isolated and decimated.
History holds a harsh lesson. During the 1930s, such a tariff strategy, designed to protect American jobs, disastrously boomeranged, aggravating the Great Depression. American exports collapsed as nations retaliated in similar fashion, and world trade fell by over 60% within a span of mere years. The lesson is clear: trade tariff policies under the Trump administration do not safeguard economies; they annihilate them.
And so here we go again. Slapping a tariff policy on all countries, a policy pushed by the likes of Donald Trump, is going to make America great again. But the reality is far from the truth. Trump's Tariff policies will destroy industries, alienate trading partners, and undermine U.S. global influence. Far from restoring greatness, it will set the stage for an economic depression, an American Empire meltdown.
Power is not brute economic war, causing economic trauma on other countries and showing pride for American isolationism.
Power is recognizing the world is interdependent, leading with wise and foresighted positive influence on behalf of all nations. All nations succeeding and becoming wealthier and improving their standard of living.
The Trump Administration's domestic and international abuse, failing to see the bigger economic picture, always ends in downfall.