Trump's tariff tactics: A cycle of chaos and uncertainty
In terms of international trade, since the 1980s, Donald Trump has perceived the United States as a victim of economic globalization, according to Dr. Rafał Szymanowski from Adam Mickiewicz University in Poznan. The expert believes that the tariffs announced by the U.S. president may not yield the expected outcomes.
During the initial month of Donald Trump's presidency, the pace of economic globalization slowed, assessed Dr. Rafał Szymanowski from the Faculty of Political Science and Journalism at Adam Mickiewicz University in Poznan, as well as from the Poznan-based Institute for Western Affairs. He stated, "What Trump has announced and is declaring regarding international trade may provoke a kind of revolution."
In relation to international trade, Trump has been consistent, seeing the United States as a victim of economic globalization since the 1980s. His primary argument is the U.S. trade deficit, especially with the EU, which he accuses of using unfair practices against the USA, he explained.
He mentioned that the tariffs imposed by the U.S. are meant to serve as a tool of pressure in international policy. They also aim to reduce the trade deficit and encourage companies to reinvest in U.S. production.
"A lot of chaos"
The expert emphasized that there is significant chaos in U.S. trade policy for now. "Trump first announced a 25% tariff on products from Canada and Mexico, then suspended it. The reasoning is unclear because he didn't gain much aside from promises. However, the announcement of a 25% tariff on products like European pharmaceuticals or cars could severely impact major EU countries, such as Germany and France," he observed.
The researcher recalled that during his first presidency, Trump also imposed tariffs. "He aimed to improve the U.S. trade balance. In dealings with China, he failed. Between 2016 and 2019, the U.S.-China trade deficit decreased from 310 to 308 billion dollars. These tariffs didn't accomplish anything. Later, in 2020, the deficit shrank, but this was due to the COVID-19 pandemic and supply chain disruptions. The tariffs did not achieve Trump's declared goals," he noted.
No chance of success
The expert added that all econometric models indicate that Trump's idea of offsetting reduced tax revenues with increased tariffs has little chance of success. "There is a significant risk that the cost of tariffs will ultimately be borne by American consumers, who will end up paying more," he remarked.
Since the end of World War II, tariffs have generally been declining globally, he pointed out.
He added that in the event of a trade war between the EU and the USA, Europe might economically align more closely with Canada. In his view, the free trade agreement between the EU and the South American Mercosur countries will not fully compensate for the losses in the American market.
The researcher denied that Trump's policies would quickly lead to a resurgence of major industries in the USA. "Closing a large factory of one of the major global corporations sometimes takes three to four years. You can't shut a factory in one day, and opening a new one in a different location involves finding a site, negotiating a land price, constructing the facility, and recruiting staff—this all takes time," he explained.
He added that the alleged decline of industry in the USA is not solely due to international trade and globalization but also results from technological advances and reduced employment needs while maintaining similar production levels.
Dr. Szymanowski noted that there are currently no indications that U.S. trade moves could trigger a global recession. He added that ironically, with Trump's new term, European stock exchanges have gained, possibly seen by investors as more stable markets.
