Monthly Archives: April 2025

Britain, Economic, European Union, Government, International trade, Politics, Society, United States

Trump’s tariffs: a deliberate and revengeful choice

WORLD TRADE

DONALD TRUMP’S revisionist structure of world tariffs against an already embattled trading system is as though an asteroid has crashed into the planet, devastating everyone and everything that previously existed there. The comparison is useful but there is this important difference. If an asteroid struck the Earth, the impact would at least have been caused by ungovernable cosmic forces. The assault on world trade, by contrast, is a completely deliberate act of choice, taken by one man and one nation.

The US President’s decision to impose tariffs on every country in the world is a shocking and momentous act of folly. Unilateral and unjustified, it was expressed in indefensible language in which Mr Trump described US allies as “cheaters” and “scavengers” who “looted”, “raped”, and “pillaged” the US. Many of the calculations on which he doled out his punishments are perverse, not least the exclusion of Russia from the condemned list. The tariffs – imposition of direct taxes – mean prices are certain to rise in every economic sector – in the US and elsewhere – fuelling inflation and very likely recession. Trump will presumably respond as he did when asked about foreign cars becoming more expensive: “I couldn’t care less.”

The tariffs – a minimum of 10% on all imports to the US, with higher levels on 60 nations that have been dubbed the “worst offenders” – throw a hand-grenade into the rules-based global trading order. These are large hikes, even for nations like Britain that have escaped the higher tariffs. They are indiscriminate between sectors, highly discriminatory against nations, even to the extent of penalising uninhabited islands in Antarctica. Foul.

The world trading system established under US leadership at Bretton Woods after the Second World War has been overturned. In effect, the nation that has underpinned the global economy for the last 80 years has expelled itself from the trading system it always led. That system’s cardinal principle – that countries in the World Trade Organisation should treat one another equally – has been blown apart.

The ceremony on which Trump made his announcement conveyed the thrill he derives from bullying and domination. A month after shutting down US development aid, his retribution list embodies special contempt for the world’s poor – 47% tariffs on Madagascar, the world’s ninth poorest country, for instance, or 44% on devastated Myanmar. While much pre-announcement rhetoric was directed at China, some of the toughest tariffs have been inflicted on countries such as Cambodia, Vietnam, Thailand, and Laos. The impact on US soft power is likely to be devastating.

In the UK, the government is trying to remain stoic. Like its trustworthy trading allies, Britain must do what it can to maintain the rules-based trading system by keeping calm. But economic war is clearly beckoning. The UK is now said even to be preparing a list of reciprocal tariffs on US goods. It is particularly vital that Britain defends its interests in food and health systems, and against the powerful digital tech giants.

Any kind of notion that Britain is some kind of winner in these circumstances, thanks to Brexit, is nonsensical. This country’s supposedly closest ally, the US, has just hiked the cost to British exporters by 10%, with an even greater rise of 25% in the case of steel, aluminium, and cars. The consequences of Trump’s tariffs will not be restricted to world trade but will impact on the global economic system more generally. This is a momentous macro moment. It will require macro responses.

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Britain, Economic, Government, International trade, Politics, United States

US tariffs: a show of coercive control

INTERNATIONAL TRADE

Intro: President Trump is wielding tariffs not as a policy tool but as an instrument of political pressure – rewarding loyalty and punishing defiance

THERE is a growing consensus that Donald Trump is embodying the French philosophy of Michel Foucault in that “politics is the continuation of war by other means”. Nowhere is this more apparent than his penchant for tariffs. He presents taxing foreign imports as a way to rebuild the American economy in favour of those workers left behind by free trade and globalisation. Quite clearly, he thinks that politics is not about truth or justice. It is about leverage and supremacy.

The UK is learning first-hand that Mr Trump, with his way of dealing and taste for spectacle, is an accidental Foucauldian – using tariffs as tools of loyalty and dominance, even against allies. If the U.S. follows through on Mr Trump’s threat to impose a 20% tariff on all imports, UK growth will suffer. The effect depends on the response. If the UK decided to do nothing that would mean GDP being 0.4% lower this year and 0.6% next. A global trade war would push that to 0.6% and 1%. Either outcome would wipe out the government’s fiscal headroom. The shrinking margins of the UK’s fiscal rules is making policymakers nervous. Trump sees no need to cloak power in objectivity.

His rationale and logic for imposing tariffs is confused. But two things are discernible. One is his self-styled image as the ultimate dealmaker; the man who can turn any situation to his advantage. The other is his view of politics as a means of structuring society to favour one group over another – not just economically, but in terms of legitimacy and who defines reality. Tariffs will probably be lifted if nations accede to Mr Trump’s wishes and, in doing so, reward politically useful constituencies, big tech allies, or his wealthy donors.

All three of these are visible in a paper-thin UK-US “economic deal”, likely to result in the lifting of Trump’s tariffs – if the US signs it. And, if so, that would further open British markets to US agribusiness; end the digital services tax, which applies to companies such as Amazon and Google; and make it difficult to hold AI companies, like those owned by Mr Trump’s ally Elon Musk, liable for harm. The danger is that whenever there’s a grievance, Mr Trump threatens tariffs – then offers to lift them if you do what he wants.

It’s even more blatant with the EU, which is expected to fine Apple and Meta under its digital competition rules. Regulation looks certain to become another front in the trade war. And that is troubling Meta’s Mark Zuckerberg.

What makes Mr Trump’s “Liberation Day” so dangerous is its scale. In 2024, the US ran a $1.2tn trade goods deficit. Just two months into his White House return, Mr Trump has imposed tariffs on goods from Canada, Mexico, China, all steel and aluminium imports, and foreign cars and auto parts. Asia will be next, including Japan, South Korea, Taiwan, India, and Vietnam.

What emerges is less of a trade policy than performance politics – where coercion, loyalty, and theatre converge. This is Foucault philosophy in action: power exercised not through rules, but through disruption and dealmaking that rewards fealty and punishes defiance. Like many others around the world, Britain is navigating a battlefield. Trump is no student of Foucault but he seems to grasp the lesson. For him, war isn’t the alternative to politics. It is politics.

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