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Intentions, strategy and the global impact of US-driven tariff wars

- Vaishali Basu Sharma

THE world is witnessing the opening volley of a highly significant shift in tariff and trade policies, marking the beginning of profound changes in global economic dynamics. Fresh off his election victory, Donald Trump wasted no time reclaiming the White House spotlight, launching an assertive and hard-hitting trade agenda.

Throughout his campaign, Trump repeatedly promised a first day filled with “shock and awe”, and he delivered just that on day one, January 20, with the ‘America First Trade Policy’ memorandum outlining a plan to prioritise US economic and national security interests, evidence of a much larger trade strategy in the pipeline. The memo asks federal agencies, including the Secretaries of Treasury, Commerce, and the United States Trade Representative, to “investigate the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits”.

China: Front and Centre of Trump's Trade Policy

A lot of what the Trump administration is doing, even when it looks like it is directed at other countries, is targeted at China. The memo highlights trade with China, starting with a review of the Phase One agreement from Trump's first term and suggesting tariff modifications to address unfair trade practices. It calls for a new investigation into discriminatory actions by China and stricter oversight of intellectual property rights. Additionally, the Trump administration supports Congressional efforts to revoke Permanent Normal Trade Relations (PNTR) with China. Investigations under the 'America First Trade Policy' memorandum are set to conclude by April 1, 2025, and reciprocal tariffs will take effect starting April 2.