Here's what Trump is really up to with high-stakes tariff gambit
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WTO: Trump Tariffs to Shrink Global Trade by 0.2% in 2025
Above: A globe with a U.S. flag with the inscription "tariffs" planted on it. Image copyright: Joel Saget/Contributor/AFP via Getty Images
The Spin
Pro-Trump narrative
The Trump administration's options are limited, given that the Biden administration left the U.S. a giant fiscal mess. Trump's tariffs will help bring manufacturing back to the U.S., boost the domestic economy, and address the trade imbalances that have led to overdependence on specific markets, particularly in critical sectors like semiconductors. Trump's trade policy isn't a fiscal policy; it's a fiscal necessity, a detox for the overheated financial system.
Anti-Trump narrative
Trump's so-called America First strategy will make everything more expensive for ordinary Americans and small businesses. His protectionist measures will backfire by impairing global economic growth, disrupting supply chains, and particularly impacting vulnerable developing economies. Soaring U.S. tariffs and broader trade policy uncertainty would hammer international commerce, sharply deteriorate global trade, and potentially trigger a global recession.