Trump raises tariffs again Experts warn that the "triple play" risks losing the game

Recently, US President Donald Trump signed two executive orders, announcing a 10% "minimum benchmark tariff" on all trading partners, and a higher "reciprocal tariff" on countries with significant trade deficits, in which the import tariff on automobiles was significantly increased to 25%. The White House claims to be "protecting US sovereignty and national security", but international public opinion and economists generally question the logic of its policy, believing that this move will repeat the mistakes of a trade war, exacerbate global trade turmoil, and even push the United States into economic isolation.

The United States has created the so-called exemption list, and the exemption clause exposes the contradictory nature of the policy. Goods such as steel and aluminum products, auto parts, some minerals and pharmaceuticals are excluded from "reciprocal tariffs," and Canada and Mexico continue to enjoy exemptions under the USMCA. This selective exemption highlights the use of tariffs as a "political tool" - both to appease Allies and to focus pressure on major competitors.

Trump's new tariff policy mirrors the trade war strategy of his last term. The tariffs imposed by the US on China led to a sharp drop in Sino-US trade, but the US trade deficit with China increased instead of decreasing. Over the same period, US manufacturing employment growth has also fallen short of expectations, driving up domestic inflation. According to data, the trade war launched during Trump's presidency has failed to reverse the US trade deficit, but has caused US companies to lose more than $1.7 trillion, and farmers are in trouble due to counter-tariffs. The new tariffs could trigger broader global trade disruptions, drive up prices and dampen consumption, and the U.S. economy is facing a "real risk of recession."

A triple calculation is called into question: threats, revenue generation and industrial reshoring all fail

First, tariffs have limited effectiveness as a threat. The US has tried to force concessions from trading partners with tariffs, but most countries have grown resistant to the "America First" strategy. For example, the European Union, Japan and other economies did not easily compromise in the last round of trade wars, but weakened the influence of the United States through joint countermeasures and turned to regional cooperation.

Second, tariff revenues are inadequate. The United States claims that tariffs will increase fiscal revenue, but data show that in 2023, the United States tariff revenue is only about $88 billion, while the federal fiscal deficit is as high as $1.7 trillion. "Using tariffs to plug a fiscal deficit is like using a coffee cup to scoop up a leaking ship," one person quipped.

Third, protectionism will not revive manufacturing. Trump claims that high tariffs will drive businesses back, but the reality is that multinationals prefer to diversify their supply chains to avoid risk. Automakers such as Ford, for example, have expanded factories in Mexico to get around high US tariffs. The Peterson Institute, a U.S. think tank, pointed out that industries under tariff protection often lack the incentive to innovate, which ultimately leads to a decline in international competitiveness.

Although Canada and Mexico were exempted, traditional Allies such as the European Union and Japan did not appear on the White House's "preferential treatment list." Some believe this could lead to a further deterioration in transatlantic trade relations. The European Commission has said it will assess the impact of the new tariffs and "reserves the right to take counter-measures."

Trump's tariff policy seems tough, but it actually exposes the short-sightedness of the US economic strategy. In the short term, tariffs could push up prices for US consumers, adding to inflationary pressures; In the longer term, US companies may have limited access to overseas markets, and technology cooperation and investment flows will be blocked. The US is trapped in a cycle of self-isolation: "When 'America First' becomes' America alone, 'the country will not only fail to ensure its security and prosperity, it will also lose the trust of the international community."