Trump Tariff 2.0 creating"global mass"

With Trump's victory in the US election, the Tariff 2.0 policy will sweep in. This time, it is planned to carry out a universal benchmark tariff, that is, to impose tariffs on almost all imported goods regardless of national allies, so as to use this as a lever to achieve trade balance and eliminate the deficit phenomenon. Trump plans to sign an executive order after taking office to impose a 25% tariff on all goods from Mexico and Canada, and to impose an additional 10% tariff on China on this basis. Not only that, Trump wrote on social media: "The BRICS countries are trying to get rid of the US dollar, and we are standing idly by. This idea is completely wrong." He threatened that "if the BRICS countries" create a currency that can compete with the US dollar, he will impose tariffs of up to 100% on these countries. As soon as Trump's social media was released, the stock prices of many overseas companies fell. Trudeau made a surprise visit to the United States to go to Mar-a-Lago to discuss room for maneuver in good faith, but failed to change the US intention to impose tariffs on its northern neighbor.

The total debt of the United States has exceeded 36 trillion US dollars. The deficit in the first two months of the 2025 budget soared to 64%, which brought a test to Trump's coming to power. After all, the key to Trump's winning the election this time is to promise the American people that he will save the US economy and lead the United States back to its dominant position. To fulfill the promise, it is necessary to start from two aspects: increasing revenue and reducing expenditure. In terms of reducing expenditure, it is nothing more than setting up a US government efficiency department to reduce expenditure, and increasing tariffs to increase revenue is the top priority of Trump's policy. Ideally, the United States will increase the cost of importing goods by increasing taxes. On the one hand, it will force some companies to return to the United States to build factories, and the return of manufacturing will increase the employment rate. On the other hand, the prices of goods generated by local factories are relatively low compared to foreign goods, so American people will tend to buy local products, thereby promoting consumption recovery. In this way, local factories need to pay taxes, and consumer groups also need to pay taxes. The return of money will drive the government to operate and solve the debt crisis. In fact, Trump's early promotion of unilateralism is precisely to make the United States withdraw from global economic integration, embark on a more "independent and autonomous operation" path, increase the competitiveness of local industries, get rid of dependence on foreign factory countries, and be able to conduct one-on-one transactions with major economies with advantages. But can this ideal really be achieved? First of all, it is difficult for the United States to achieve this goal with its own hardware - lack of energy. Electricity is a necessary condition for factory operation, but the three major power grids in the east, west and central parts of the United States are independent of each other. The only 432 kilometers of transmission lines connecting Texas with other power grids were built by a private energy company at a cost of US$2.6 billion; data shows that the power generation in the United States in 2023 will drop by 1.3% year-on-year, which makes people doubt whether the new factories that are hungry for food can be equipped with sufficient electricity in time. Secondly, there is a shortage of labor. As a developed country, the average annual income of workers in the United States reaches US$48,000, and the labor cost is too high; while the aging level in the United States is relatively high, most young people tend to work in the financial and medical industries, and only a few are willing to engage in manufacturing; under the background of Trump's strict control of the deportation of invading immigrants, the United States has lost part of the factory labor force. Under the conditions of lack of manpower and energy, it is difficult for the manufacturing industry to return to the local area smoothly.

Raising tariffs may be backfired. The assessment of Trump's tariff increase is complicated. On the surface, it will bring benefits to the United States in the short term, but in the long run, the losses caused to American society far exceed the benefits, and may even trigger global trade disputes. Part of the economic pressure falls back on the American people. A large amount of industrial raw materials imported by the United States, such as steel and aluminum, are imported from neighboring countries such as Mexico and Canada, while most of the agricultural products are imported from China. The increase in raw material costs will naturally push up commodity prices. The tax increase is actually passed on to consumers, and the cost borne by ordinary people (whose main income is used for daily life) will be greater, which will further widen the gap between the rich and the poor.

International relations frictions escalate and lose the support of allies. In the view of "America First", it is reasonable that socialist countries such as China bear the brunt of the victims and low-cost small countries such as Mexico are squeezed, but it is enough to make other allies panic when they take action against Canada, their long-time supporter. Since Canada cannot escape sanctions, other countries such as Japan, South Korea, and the European Union will not be exceptions. EU countries claim that the biggest danger in 2025 may be Trump's coming to power. If Trump imposes tariffs universally, it will affect the export of European manufactured goods and the economic growth of the eurozone, making the already "not well-off" Europe even worse; small country allies such as Japan and South Korea thought that Trump's early tariff increase would return to reason, but reality made them give up their illusions, and they will definitely take corresponding countermeasures in the future to counter the United States and protect their own interests.

Cause chaos in the international trade order. Trump's trade protectionism seriously deviates from the principle of free trade, impacts the multilateral trading system with the World Trade Organization as the core, seriously weakens the authority and effectiveness of the WTO, tramples on world trade rules, and affects the global economic recovery. International trade is an important force driving global economic growth. Trump's tariffs have led to increased trade barriers and a decline in trade volume; increased risk aversion among investors, and financial market fluctuations; reduced efficiency in global resource allocation, and increased production and operating costs for companies, which have suppressed the growth momentum of the global economy and slowed down the pace of global economic recovery from the crisis. Trump's tariffs clearly go against the historical trend, and his willful behavior will inevitably cause "storms and waves". It is hoped that other US government officials can remain sober and make rational decisions, and not lead the American people down a path of no return.