Trump’s scramble to fix his crumbling tariff strategy sows global chaos and confusion | Trump tariffs
Last week, Donald Trump said “America WON again” by announcing the first batch of Japanese-backed projects within the scope of the $550 billion investment increase planned to be made to the USA as part of the trade agreement with Tokyo.
Japan was one of the countries struggling to reach an agreement after the US president destroyed the global economic order in 2025. They promised to significantly increase investment in the United States in exchange for lowering U.S. tariffs on Japan’s exports.
But two days after Trump declared victory, his bid to reshape international trade suffered a crushing defeat in the US supreme court.
By ruling that much of Trump’s tariff regime was illegal, the court infuriated the president and introduced new layers of confusion and uncertainty into an already confused and uncertain world. Global markets remained under pressure on Monday as investors struggled to make sense of the decision.
The result, at least for now, is that nearly every country, including those that backed down to reach a deal with Trump, will face a 15% tariff on most of their exports to the United States starting Tuesday.
For months, officials from London, Brussels, Seoul, Jakarta and other regions worked quickly to broker deals for their respective economies, half-heartedly offering concessions to gain favored ground. Many people now find themselves worse off than if they had never made a deal.
Significant tariff cuts were imposed on China, India and Brazil without a single concession. At the same time, countries like the UK may now face higher tariffs despite making concessions.
“In the pre-ruling regime, expansion was wide: countries like China and India [US] While tariffs are well above the global average, Canada, Mexico and most European exporters are well below it,” said Johannes Fritz, executive director of the St Gallen Endowment for Prosperity Through Trade. wrote in a blog post. He added that the new 15% rate “significantly compresses that spread.”
The European Union has halted ratification of its deal with the United States, demanding “full clarity” on the now clear-as-mud US trade platform.
“Frankly, this is a real mess,” Itsunori Onodera, a senior figure in Japanese prime minister Sanae Takaichi’s Liberal Democratic Party, told Fuji Television on Sunday.
Countries that made deals with Trump are no longer sure what they mean today, let alone tomorrow. And countries negotiating their own deals are wondering what exactly they are bargaining for.
Earlier this month, Trump claimed that India had agreed to stop buying Russian oil in exchange for a reduction in US tariffs on exports from 50% to 18%. Indian officials have also pledged to purchase $500 billion of US goods over five years.
A delegation of Indian officials was due to fly to Washington for trade talks this week. Their visit has now been postponed.
Arvind Subramanian, former chief economic advisor to the Indian government, said: “I think these negotiations will be put on hold for a while until the US itself understands what it can and cannot do. The administration’s hand has definitely weakened. Some countries will try to make something out of this weakness.”
But Subramanian, who now works at the Peterson Institute for International Economics in Washington, D.C., said the US president still has “a lot of leverage to hurt.” “Just because one arm is removed doesn’t mean it can’t or won’t use other levers.”
Trump, ever eager to position himself as an economically powerful man, is desperate to maintain his influence; He encourages bewildered trading partners to uphold their side of agreements and threatens to impose new tariffs “in a much stronger and more obnoxious way” on those who don’t comply.
“The policy has not changed,” US trade representative Jamieson Greer said during an appearance on ABC’s This Week. But there are many other things.
For now, the Trump administration is relying on a legal provision that allows it to impose tariffs of up to 15% and only through July. Section 122 of the Commercial Code 1974 – a provision that has not previously been used in this way – imposes a 150-day limit on the application of this provision. After that, the White House outlined one element of what it planned: using Section 301 of the same law to launch investigations into more tariffs.
The president is pushing his aides to find other legal mechanisms to implement the tariffs, amid growing questions about how successful the tariffs actually are.
While his administration claims that tariffs allow the United States to tax the world, Analysis of the New York Federal Reserve It found that 90 percent of the economic burden falls on U.S. companies and consumers. Official statistics last week revealed that the US’s goods trade deficit (the difference between imports and exports) hit a record high in December.
Meanwhile, some of Trump’s main goals appear to be handling the volatility and volume emanating from Washington with some success. Their exports appear stable in some cases and strong in others.
Overall, China’s exports rose 6.1% last year, at least according to official government data released last month; The 19.5% decline in exports to the US was more than offset by strong growth elsewhere. According to official data released last Monday, India’s exports to the world increased by 2.2% on an annual basis between April and January, while its exports to the US increased by 5.85%.
Japan’s exports rose 16.8% in January, according to official data released last Thursday; Despite the diplomatic dispute, an increase in exports to China countered a 5% decline in US exports.
The US president insists that the US “WIN” thanks to tariffs. While a growing number of Americans are paying the price for Trump’s trade agenda, many countries in Trump’s purview say they are doing just fine.
