KARACHI:
In the run-up to the US presidential election, Donald Trump championed sweeping trade tariffs on foreign goods as a magic wand that will help “Make America Great Again” by earning billions of dollars in revenue, spurring industrial growth, and creating millions of jobs. The policy reignited a debate about trade protectionism, economic nationalism, and the health of the world’s largest economy. Trump followed through on his promise after returning to the White House, announcing unprecedented tariffs on friends and foes alike through executive orders.
It wasn’t random. The policy involved a strategic approach based on trade balances and security relationships. Countries with US trade deficits and defence ties, like Australia, received 10% tariffs. Japan and South Korea, despite having similar security alliances, faced 15% due to larger surpluses. The rest of Asian nations were slapped with average tariffs of 22.1%, though those willing to negotiate – like Pakistan, Thailand, Indonesia, Malaysia, and the Philippines — secured a “discount” rate of 19%. The most surprising victim of Trump’s tariffs was America’s strategic ally India, which faced 50% duties – the highest after Brazil — for refusing to stop buying crude from Russia.
Trump appears to have gained the upper hand in the tariff war, as most of America’s trading partners – including the European Union – ultimately accepted unfavourable trade terms, wary of economic retaliation and the risk of losing access to the lucrative US market. Even Canada, which initially responded with retaliatory tariffs, has begun scaling some of them back. However, China, the main target of Trump’s tariff strategy, refused to yield and responded with substantial counter-tariffs. This standoff led Trump to declare two consecutive 90-day “truces” as both nations continue negotiations towards a compromise.
While Trump may have won the round one of trade war on the diplomatic front, the economic goals he sought remain largely unfulfilled. The US president’s move may not have upended the international financial system, as analysts feared earlier, recent data reveals that the tariff strategy is driving inflation, disrupting supply chains, and stalling the labour market at home — consequences that are hitting American workers and consumers the hardest.
Trump sought to protect American jobs, particularly in manufacturing, by incentivising domestic production and discouraging imports by making foreign goods more expensive through tariffs. Such measures, proponents argue, can restore industrial heartlands hollowed out by globalisation, but critics say that the economic costs of the tariffs dwarf their benefits.
One of the immediate consequences of tariffs has been a visible hike in prices across America. According to the July 2025 Consumer Price Index (CPI) report, overall prices rose by 2.7%, with food costs alone climbing by 2.9%. Much of this inflation is attributed to tariffs on both agricultural and industrial imports. This price surge is not limited to food; other consumer goods, including electronics and automobiles, have also become more expensive, disproportionately affecting low- and middle-income Americans, who spend a larger chunk of their income on essentials.
If Trump’s economic logic is to be trusted, the US would expect a robust job growth — especially in industries directly targeted for protection. However, US media reports tell the opposite story: job creation has virtually stalled since early 2025. While the unemployment rate remains low, fresh hiring has waned, and key industrial sectors are struggling. The July 2025 jobs report indicate a net gain in jobs, but it fell short of expectations and revealed slowdowns in manufacturing and construction, the sectors which, according to Trump’s calculations, were supposed to benefit from tariffs.
Trump’s tariffs were bound to trigger retaliation. And this is exactly what happened. The US president managed to bully some countries into accepting unfavourable deals, but America’s three key trading partners — China, Canada, and Mexico — responded with targeted measures against American agriculture, technology, and manufacturing sectors.
As a direct result, American exporters are now struggling to stay competitive in markets abroad, building further pressure on the very workers Trump claims to protect. Similarly, US farmers have seen dwindling demand for soybeans, pork, and dairy exports, leading to farm closures and a growing dependence on federal subsidies to stay afloat.
A March 2025 analysis by CNBC indicates a broad consensus among economists, both conservative and liberal, that Trump’s tariffs are unlikely to yield sustained economic benefits. These economists argue that tariffs act like a regressive tax, hitting lower-income households the hardest. Their assessments predict a long-term drag on GDP and a net loss of jobs, particularly when factoring in retaliatory tariffs. While some industries may experience modest employment gains, these are expected to be outweighed by job losses in other sectors, especially those reliant on imported inputs or export markets.
Politically, Trump’s tariffs offer a simple message: “We’re Making America Great Again.” But the stark economic reality is far more complex. While trying to protect American industries, the tariffs have instead exposed the economy’s vulnerability to global shocks and its dependence on imports for both consumer goods and industrial inputs.
Moreover, many manufacturers appear to be absorbing the cost of tariffs by passing them onto consumers or cutting corners elsewhere, reducing labour hours, freezing hiring, or slashing investments in growth. This feedback loop — higher prices, reduced investment, slower hiring — creates the conditions for economic stagnation, not revival. Wall Street strategists are already warning that the US economy is drifting towards stagflation. Data suggests an approaching period of sticky inflation and sluggish economic growth, according to analysts.
Instead of clinging to outdated models of economic nationalism, Trump requires a forward-looking strategy — one that tackles the disruptions of globalisation while preserving economic dynamism and shielding everyday Americans from undue hardship. As implemented, tariffs are not that strategy; they are a short-term political tool with long-term economic costs.
While Trump appears relentless in pursuing his tariff strategy, the American judiciary may offer a glimmer of hope. Last week, a federal appeals court struck down several of his tariffs, ruling that he unlawfully leaned on emergency powers to impose the import taxes. The court held that the International Emergency Economic Powers Act does not authorise the type of tariffs Trump introduced earlier this year, thereby upholding a lower-court decision against them.
The White House, however, defended the president’s powers as Attorney General Pam Bondi said the administration will appeal the ruling. Attention now turns to the Supreme Court, which will deliver the final verdict.
The writer is an independent journalist with special interest in geoeconomics
