US President Donald Trump has never hidden the fact that he is very happy to use tariffs as part of his arsenal.
- For me, the most beautiful word in the dictionary is "tariffs". And that's my favorite word, he said in an interview with Bloomberg in October during the election campaign for the presidential election in November.
Trump used tariffs actively during his first presidential term from 2017 to 2021, and with just a few weeks left in office, he has repeatedly resorted to his favorite trade weapon. Most recently, he has introduced tariffs of 25 percent on imports of steel and aluminum from all countries. He uses tariffs to obtain concessions from other countries on everything from trade to immigration and drug trafficking.
It changes the rules of the game and the norms for international trade when tariffs are not only related to trade, analysts say according to AFP. Trump will use tariffs to close the trade deficit that has existed since the late 1980s. The United States imports far more foreign goods than Americans send the other way.
In addition, he is using tariffs to pressure other countries to take action in areas that concern the United States. For example, Trump has imposed a 25 percent tariff on Mexican and Canadian goods. According to Trump, the reason for imposing increased tariffs on the countries was that he wanted to hold the countries to their promises to help stop the flow of illegal immigrants and illegal drugs to the United States. The new tariffs were put on hold shortly after Canada agreed to deploy, among other things, almost 10,000 employees at its border with the United States, while Mexico promised to send 10,000 soldiers to the border.
Analysts and countries can try to predict in which areas tariffs will be imposed based on economic conditions. But when Trump, the leader of the world's largest economy, bases trade policy on something other than economics, it could create chaos, warns researcher Maurice Obstfeld from the Peterson Institute for International Economics think tank in Washington D.C.
- The level of uncertainty in trade policy has exploded, he tells AFP.
He adds that Trump's tactics could change global supply chains and that some countries may want to disconnect from the US market altogether because the risk and uncertainty are considered too high.
Christine McDaniel, a researcher at the Mercatus Center think tank in Washington D.C. and former part of then-President George W. Bush's administration, says it is "very clear that Trump sees tariffs as an important tool in his toolbox."
- He sees it as much as a negotiating tool as a way to create a balance on trade, she tells AFP.
Stephen Moore, a longtime outside adviser to Trump, sees tariffs as a way for the United States to give countries "incentives" to do what the United States wants. Partners such as Canada, Mexico and China risk greater economic losses than the United States, he says.
He describes Trump's approach as effective. But he acknowledges that it can be dangerous if it creates tensions in relations with normally good trading partners.
jel /ritzau/AFP
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