Author: Prof. Engr. Zamir Ahmed Awan, Founding Chair GSRRA, Sinologist, Diplomat, Editor, Analyst, Advisor, Consultant, Researcher at Global South Economic and Trade Cooperation Research Center, and Non-Resident Fellow of CCG. (E-mail: awanzamir@yahoo.com).

In a globalized world where economies are increasingly interlinked, President Trump’s sweeping imposition of tariffs on imports from nearly all major trading partners has stirred a storm—both domestically and internationally. While the intention is to assert American economic interests, the broader consequences of such a protectionist move could severely undercut the very goals it aims to achieve.

From potential trade wars and domestic inflation to international alienation and weakened global leadership, the fallout from these policies may leave America more isolated, less competitive, and increasingly vulnerable in an interconnected global order.

Tariffs in Theory vs. Reality

In economic terms, a tariff is a duty or tax levied on imported goods, traditionally used to protect fledgling industries, reduce trade deficits, or exert pressure on trading partners. Historically, countries like the U.S. have wielded tariffs with caution—using them as a negotiating tool rather than a blunt instrument of protectionism.

But today’s context is different. The U.S. is no longer a manufacturing-heavy economy. Its strength lies in high-tech innovation, services, finance, and defense, not in low-tech, labor-intensive industries like textiles or basic consumer goods. Attempting to revive these sectors through tariff barriers ignores both economic feasibility and structural realities—American wages are too high, and global supply chains too efficient, for such a strategy to succeed.

A Unilateral Decision with Limited Consensus

Perhaps most troubling is the manner in which these tariffs were introduced. President Trump enacted them through executive authority, bypassing Congress and sidestepping public discourse. Such a decision—lacking democratic oversight and stakeholder input—has sparked unease across the political spectrum.

Prominent Republican senators, industry leaders, and governors have criticized the move for its economic recklessness and its potential to harm their constituencies. Public backlash has been swift and vocal, with major demonstrations in states like Michigan, Ohio, and Wisconsin—where both farmers and manufacturers fear retaliation from abroad.

In March 2025, more than 50,000 demonstrators gathered in Washington, D.C., in one of the largest rallies against trade policy in recent memory. Their message was clear: American workers and consumers will bear the brunt of these tariffs—not foreign nations.

Who Really Pays for Tariffs?

Despite political rhetoric, tariffs are not paid by foreign exporters. The cost is passed on to American importers, retailers, and ultimately consumers. Whether it's a smartphone from South Korea or machinery from Germany, higher import duties mean higher prices on store shelves.

A recent analysis by the U.S. Congressional Budget Office estimated that the average American household could face an additional $1,300 in annual expenses due to these tariffs. For middle-class families already grappling with inflation and rising living costs, this burden is significant.

Moreover, small businesses—which form the backbone of the U.S. economy—are disproportionately affected. Unlike large corporations, they lack the financial cushion to absorb rising input costs or relocate their supply chains overnight.

Strategic Exceptions or Political Favors?

An especially puzzling element of the new policy is its selective application. Major economic powers like China, Canada, Mexico, and Germany have been targeted, while Russia and a few minor trading partners have been curiously exempted.

Given that Russia accounts for only a tiny fraction of U.S. imports, the exclusion seems more symbolic than strategic. Yet it raises uncomfortable questions: Is trade policy being shaped by economic logic—or geopolitical calculations and personal diplomacy?

This inconsistency undermines the legitimacy of the tariffs and weakens America's moral and strategic standing on the global stage.

Global Reaction: Allies Alarmed, Rivals Energized

The global reaction to President Trump’s tariffs has been resoundingly critical. Traditional U.S. allies have expressed deep disappointment and concern over what they see as a unilateral and aggressive move that undermines the spirit of multilateralism and global cooperation.

The European Union issued a joint statement condemning the tariffs as “unjustified and damaging to global trade norms.” German Chancellor Annika Schulz warned that the new U.S. stance could “trigger a period of economic confrontation we thought we had left behind in the 20th century.”

Canada, America’s closest neighbor and one of its top trading partners, described the tariffs as “an attack on decades of partnership and mutual growth.” Prime Minister Liam Moreau announced retaliatory duties on American agricultural products and automobiles, pledging to “defend Canadian workers and industries.”

China took a more strategic approach, framing the tariffs as evidence of American decline. In a statement from its Ministry of Commerce, Beijing accused the U.S. of “retreating from global leadership” and vowed to deepen trade ties within RCEP and BRICS—without American involvement.

Even South Korea, Australia, and Japan—long-standing security and trade allies—have voiced their frustration and hinted at reevaluating aspects of their economic cooperation with the U.S. Meanwhile, Russia welcomed the move as a validation of its long-held criticism of Western trade hypocrisy.

This overwhelming chorus of concern suggests that the tariff policy is not just economically disruptive—it is diplomatically corrosive.

Global Retaliation: A Domino Effect

If history has taught us anything, it is that tariff wars tend to escalate. In response to U.S. tariffs, the European Union, China, and India have already announced countermeasures, targeting American goods such as soybeans, bourbon, and automobiles.

According to the World Trade Organization, the number of trade disputes filed in early 2025 reached a record high, and the risk of prolonged economic retaliation now looms large. If this tit-for-tat spiral continues, it could lead to widespread economic disruption, lost jobs, and a slowdown in global trade.

The World Bank warns that a prolonged tariff conflict among major economies could wipe out up to 2.5% of global GDP—roughly $2 trillion—within two years. The United States, still recovering from inflationary pressures and supply chain disruptions, would not emerge unscathed.

Undermining U.S. Alliances and Global Influence

Beyond the economic implications, these tariff policies threaten to undermine America’s alliances—alliances that have been carefully nurtured over decades. Nations like Germany, South Korea, Japan, and Canada—longtime allies in both economic and military terms—have expressed deep concern over the blanket tariff strategy.

In contrast, economic blocs like BRICS (Brazil, Russia, India, China, South Africa), SCO (Shanghai Cooperation Organization), and RCEP (Regional Comprehensive Economic Partnership) are gaining momentum. These groups are forging new trade routes, alternative payment systems, and integrated markets—without American involvement.

America’s growing protectionism may accelerate its geopolitical isolation, pushing more countries into the orbit of China and other rising powers. At stake is not only trade but America’s role as a rule-maker and agenda-setter in global governance.

The End of Economic Diplomacy?

In the past, the U.S. has skillfully used trade concessions to gain diplomatic leverage, strengthen alliances, and promote stability. Trade policy was intertwined with foreign policy, soft power, and leadership.

By reducing these relationships to mere transactions, the new tariff regime represents a radical departure from traditional American diplomacy. If economic gains are now prioritized at the expense of geopolitical influence, the U.S. risks losing both.

Rethinking the Path Forward

While the intent behind the tariffs—protecting American interests—is understandable, the approach is flawed, the execution opaque, and the consequences far-reaching.

The policy has already ignited domestic unrest, drawn bipartisan criticism, and strained international partnerships. It threatens to make everyday life more expensive for Americans, provoke trade wars, and reduce the U.S.'s global relevance.

Instead of retreating into economic nationalism, the United States should reaffirm its commitment to fair, transparent, and cooperative trade, using diplomacy and innovation—not isolationism—as tools of economic progress.

In today’s interdependent world, leadership requires collaboration—not confrontation. America must choose wisely.

(ASIA PACIFIC DAILY)