America's Capacity for Harming Itself Has Suddenly Risen Sharply

Trump's MAGA agenda could end up driving a global shift that makes other countries great again

- KAUSHIK BASU

President Donald Trump's return to the White House has been accompanied by dramatic economic-policy shifts, setting countries around the world on edge. The US has imposed sweeping tariffs on Chinese, Mexican and Canadian imports—pausing, reinstating and later granting temporary exemptions for goods compliant with the US-Mexico-Canada Agreement (USMCA). In response, both Canada and Mexico have announced retaliatory tariffs on key US industries, while Trump has vowed to impose "reciprocal" tariffs on "everybody across the board."

Since no other country wields as much influence over the world economy as the US, these abrupt and unpredictable policy shifts have fueled fears of a global slowdown, triggering a stock-market selloff—starting in the US. Trump's trade policies may inflict more damage at home than abroad. While some of his moves, especially efforts to boost domestic semiconductor making, could prove beneficial, his erratic policy shifts jeopardize America's economic stability, undermining its competitiveness and long-term growth.

Trump has long been frustrated by the fact that the US runs trade deficits with many countries. During his recent meeting with Indian Prime Minister Narendra Modi, he specifically raised concerns about America's $45.6 billion trade deficit with India. In response, Modi pledged to increase energy imports from the US.