US President Donald Trump continues to use tariffs as a strategic weapon against both his adversaries and allies.
This policy, a key part of his election campaign promises, aims to reshape the trade balance in favour of the US.
However, the same policy raises questions about its long-term impact on the global economy.
Trump’s recent decisions to impose tariffs on imports from Canada, Mexico, and China, including a 10 per cent tariff on all Chinese imports and a 25 per cent tariff on goods from Mexico and Canada, have triggered strong reactions from the affected countries, opening the door for a fierce economic confrontation.
At the core of this policy is Mr Trump’s view of the deficit in trade between his country and other countries as a threat to the US economy.
He believes the American market, the world’s largest, should be in a more balanced position with its trading partners.
By the same token, he aims to pressure countries into making concessions that benefit the US economy.
This was evident in his dealings with China, Mexico, and Canada, where he insisted on renegotiating the North American Free Trade Agreement (NAFTA) or withdrawing from it entirely.
As trade measures intensified, global reactions were swift. Canada announced retaliatory tariffs on American imports, while China turned to the World Trade Organisation (WTO) to seek a resolution.
Meanwhile, the European Union made it clear that it would respond “firmly” if subjected to unfair tariffs.
With the EU jumping into the fray, the situation could escalate into a global trade war with significant consequences on international trade.
Despite growing international outrage, Trump appears to view tariffs, not just as an economic tool, but as a means to achieve political gains that strengthen the global position of the US.
The new president’s focuses on renegotiating NAFTA and securing better trade terms with Canada and Mexico, which may push him to take further coercive measures if necessary.
The real threat emanating from these policies extends beyond the US and its direct trading partners. It can possibly impact the global economy as a whole.
Canada, already grappling with economic challenges, such as rising inflation and increased taxes, is particularly vulnerable to the new US tariffs.
Meanwhile, China, one of the world’s largest economies, is responding by escalating the dispute through legal channels, raising fears of a broader economic crisis.
As economic tensions rise, diplomatic solutions remain on the table. While China has expressed willingness to “sit at the negotiating table” with Washington, Canada and Mexico are hoping for a renegotiation rather than further escalation.
However, as tariffs continue to mount, Trump’s decisions will be pivotal in shaping the future of global trade relations.
Trump’s tariffs may be a strategic move to rebalance the economy, but they also pose significant risks to global economic stability. On one hand, they could help achieve his economic and political goals in the short term. On the other, they risk slowing global economic growth, increasing inflation, and deepening trade conflicts.
A destructive trade war may be on the horizon, threatening decades of economic integration between the US and its North American partners.
The repercussions of these policies will not only affect the targeted countries, but could also have far-reaching consequences on the global economy, including the US itself.
The key question remains: Can the US achieve the trade balance Trump seeks without destabilising the global economy? Or are these policies merely the beginning of a prolonged economic struggle?
Mohamed Fahmy is the editor-in-chief of The Egyptian Gazette and Egyptian Mail newspapers
