Trump’s Trade Tariffs and the Future of the Global Economic Order

An Editorial Analysis by Turkish British Magazine

Introduction: A Shift in Global Trade Dynamics

For decades, the global economy has functioned under the principles of free trade and market liberalism, with the United States at the helm of a system that encouraged low tariffs, open markets, and international cooperation. However, the emergence of economic nationalism, first signaled by Donald Trump’s trade policies in his first term and now set to escalate in his second, is reshaping the global order.

Once, it was citizens who felt the burden of government-imposed tariffs. Now, it is governments fearing the tariffs that Trump is set to impose. This fear, over the coming years, may become the United States’ most powerful geopolitical weapon.

While initially perceived as a US-China confrontation, Trump’s tariff policies are proving to be far more extensive, targeting not just economic rivals but also traditional allies such as Canada, Mexico, and the European Union. As protectionism resurfaces, the post-World War II liberal economic order is being challenged, forcing the world to rethink the rules of global trade.

The Historical Context: The Liberal Economic Order

The Bretton Woods Conference of 1944 laid the foundation for a global economic structure dominated by free markets and trade liberalisation, with the United States as the key architect. This system thrived on:

✔ Open markets and low tariffs

✔ A dollar-backed monetary system

✔ Global financial institutions like the IMF and World Bank to oversee stability

The Marshall Plan reinforced this order, rebuilding Western Europe under the condition that recipient countries embrace free market principles. Meanwhile, the Washington Consensus—a set of economic policies promoting privatisation, deregulation, and free trade—shaped developing economies under US influence.

For decades, this system functioned smoothly. But by the 1970s, cracks began to appear. The Vietnam War, rising costs, and the shift of manufacturing to lower-cost economies weakened the US position. In 1971, President Nixon abandoned the gold standard, decoupling the US dollar from gold and shifting the global economy towards a floating exchange rate system.

This change allowed capital to flow freely, but it also set the stage for the dominance of multinational corporations and massive global supply chains. The greatest beneficiary of this system? China.

The Rise of China and the US Response

By leveraging cheap labour and aggressive industrial policies, China became the world’s manufacturing hub, turning into a formidable economic competitor to the US.

Washington’s concerns escalated when China began investing heavily in technology, artificial intelligence, and semiconductor industries, threatening US dominance in key strategic sectors. In 2023, Jake Sullivan, President Biden’s National Security Advisor, acknowledged that the old economic model had failed and that the US was moving towards a “New Washington Consensus.”

This shift recognised two major risks:

✔ China’s refusal to play by global economic rules

✔ The US economy’s vulnerability to global supply chain disruptions

The COVID-19 pandemic and the Suez Canal blockage of 2021 further demonstrated these vulnerabilities. In response, both Biden and Trump adopted a new economic nationalism, aimed at decoupling key industries from China and reshoring critical manufacturing.

Trump’s Trade Tariffs: Economic Protectionism in Action

Trump first implemented tariffs on China during his first presidency, citing national security concerns. These tariffs targeted strategic sectors, such as:

✔ Solar panels (2017) – 30% tariff on Chinese imports

✔ Aerospace, medical, and manufacturing equipment (2018) – 25% tariffs

Although initially aimed at China, Trump’s new round of tariffs will not be limited to geopolitical rivals. He has announced his intent to apply tariffs even to US allies, including Taiwan and the European Union.

✔ Against China, the aim is decoupling—reducing economic interdependence to prevent supply chain vulnerabilities.

✔ Against Europe, the goal is trade leverage—forcing the EU to import more American goods or face higher costs for their exports.

The rationale? Trump claims that “the US buys everything from Europe, but Europe buys nothing from us.” The aim is to redirect global demand towards American-made products, boosting domestic manufacturing and creating new jobs.

However, history suggests caution.

The Risk of Economic Backlash

Protectionist policies have historically produced mixed results. One of the most infamous examples is the Smoot-Hawley Tariff Act of 1930, introduced by President Herbert Hoover to protect American industries from European competition.

The result?

✔ Other nations retaliated with counter-tariffs, collapsing US exports.
✔ The global economy contracted, deepening the Great Depression.
✔ US imports dropped by 66%, causing massive job losses.

While Trump’s tariffs are more targeted, the risk of retaliation from trade partners remains high. In response to US tariffs on European goods, EU trade leaders have already begun strengthening ties with China, aiming to diversify markets and reduce dependency on the US.

If these trends continue, the economic world order that emerged after the Cold War will fundamentally change, leading to a multipolar system where no single country dictates the rules of trade.

Trump’s Strategic Play: A High-Stakes Gamble

While Trump’s tariffs could strengthen US domestic industries, they come at a cost. Higher tariffs mean:

✔ Increased prices for US consumers
✔ Tensions with traditional allies
✔ Shifting trade partnerships towards China

However, Trump’s gamble is based on a calculated strategy—using economic pressure to extract political and trade concessions.

A prime example? The 2018 Pastor Andrew Brunson case.

✔ Turkey arrested a US pastor on espionage charges.

✔ The US imposed economic sanctions, crashing the Turkish lira.

✔ Within three months, Turkey released Brunson.

This episode proved Trump’s willingness to weaponize economic tools. His new round of tariffs follows the same logic—applying pressure until trade partners comply.

The challenge? Unlike Turkey, economic giants like the EU and China have the ability to fight back.

Conclusion: The Future of Global Trade

Trump’s tariffs are more than just economic measures—they are a geopolitical strategy designed to reshape global trade in favour of American dominance.

However, their long-term success remains uncertain. Will they revitalise US manufacturing or trigger a global trade war?

What is clear is that the post-World War II liberal economic order is weakening. A new multipolar world is emerging, and whether it will be defined by cooperation or conflict will depend on how nations respond to Trump’s economic offensive.

As the next few years unfold, one thing is certain: the rules of global trade are being rewritten.