The impact of the tariffs implemented by the Trump Administration is being felt every day and some of them have not been implemented as of yet. The goal seems to be the same as with any other tariff that has been imposed, to level the playing field for American workers and industries, but this time around they are so widespread and indiscriminate that they are raising serious concerns among experts who think the U.S. might be trading global cooperation for isolation.
The numbers are staggering when you look at them and add the previous tariffs that these countries were already subject to. The EU will be paying 20% tariffs, China is looking at a combined 54% increase and every other country in the world that was not named specifically is getting a 10% blanket tariff with no exceptions. All countries,” Trump emphasized, would be affected by what he dubbed *Liberation Day*.
World leaders were not impressed, The UK’s Prime Minister Keir Starmer tried to keep things calm, promising to “keep a cool head”, but in Europe, Ursula Von Der Leyen vowed retaliation if a deal is not reached and soon.
The real aim of the tariffs and their impact on the US economy
Scott Bessent, Trump’s Treasury Secretary, outlined the administration’s goals: protect American jobs, beef up local industry, and boost revenue. Additionally, the intention is to cut reliance on rivals, especially when it comes to national security and use economic leverage to advance U.S. interests. But the first wave of tariffs were used as bargaining chips in debates around immigration and fentanyl imports.
Columbia professor Brett House thinks the real strategy lies in a power trip “The president loves creating a situation where other countries… have to come and bargain with him. This is the essence of the kind of power that a bully and an autocrat tries to create.”
Wharton’s Joao Gomes thinks the trade deficit is the target “Eliminating the trade deficit is the most important thing… It’s not just politics, it’s not selling nationalism. This is truly about fundamental economic principles.”
Still, those that are trying to make sense of the situation seem stuck, as there is no other time in he past (not even during the Great Depression when President Hoover’s Smoot-Hawley Act cranked tariffs to over 40% to protect U.S. agriculture) when the situation has been this dire. Even the earlier tariffs Trump placed account for nearly 5% of GDP which is unheard of.
Economist Michael Kitson describes that comparing the current situation to the past is useless, as “Most of those conditions don’t apply to the U.S. now,” and, with today’s tightly woven global supply chains, the impact could be even more disruptive. “The likely impact of tariffs is more complicated and more likely to be negative.”
Some strategists, like Kevin Ford at Convera, are starting to wonder if Trump’s real aim is to engineer a “hard reset”, and after the S&P 500 dropped 5% post-announcement, the idea is not quite as out-there as it once sounded.
But experts have noticed that one massive part of the economy keeps getting left out of the tariff conversation, and that is services. The U.S. is the top services exporter in the world, yet the new tariffs are focused entirely on goods.
Harvard professor Ebehi Iyoha says that is a dangerous oversight. “There’s been a lot of focus [in] the trade policy rhetoric on goods. but they’re not really thinking: ‘How has the U.S. benefited in global traded services?’” Iyoha’s upcoming study highlights how smaller service businesses could be hit hard if international sentiment turns. “If we think about the downstream effects of these tariffs on people’s willingness, for example, to visit the United States… how do we balance that out?”
