Geopolitics Review - 28th April 2025

The Donald Diaries: Trump, Tariffs, and The Art of the Trade War

Dylan Muggleton

Apr 28, 2025

Contents

Introduction
Trump and Tariffs - His Weapon of Choice
Trump’s Early Tariffs
Trump’s Liberation Day
Who Needs Who?
Concluding Remarks
News In Geopolitics This Week

Bitesize Edition

One of the biggest narratives during Trump’s first few months has been his tariff policy. Early on in his second term, he enacted tariffs on specific nations and products, but this dramatically escalated at the start of April. On Trump’s “Liberation Day”, we saw his sweeping tariffs that targeted over 180 countries.
As we now know, a few days later, Trump did pull back most of his tariffs. However, he has restarted and maintained an escalatory tariff war with China. If any trade relationship is going to have a global impact if it is disrupted, it’s the U.S.-China relationship.
Even though Trump pulled back most tariffs from Liberation Day with his 90-day pause, we can still take lessons from his initial tariff onslaught. What does history teach us about Trump and his relationship to tariffs, who was hit the hardest by his initial Liberation Day tariffs, and what is his overarching aim here? Let’s dive in.

Introduction

As we enter into a world where power is one of the greatest commodities, Trump seeks to use his power through the implementation of his favourite tool in the world: Tariffs.

Today, I’ll discuss Trump’s trade policy, his efforts to reindustrialise and his America First stance. I’ll also delve into how he has used tariffs and who against as he pursues a strategy of economic statecraft to draw other nations to the negotiation table to get what he wants.

Trump and Tariffs - His Weapon of Choice

Trump first confessed his love for tariffs in the 1980s. He also proposed his belief that the world should pay for American security back in the 1980s, which he is also pursuing today. He’s been remarkably consistent with the fact that he has been saying this for four decades. We also have his first presidency to look at, when he also entered into a trade war with China. So, what else can we expect from this latest chapter in history? If we zoom out, the grand strategy aim here is that Trump is in pursuit of America First, with tariffs as his right-hand man.

A tariff is an additional charge on imports, paid by the nation that implements it. So a tariff will raise the costs for American businesses to buy goods from abroad. This could then raise prices for consumers as businesses seek to protect their profit margins and push any disruptions further down the supply chain.

Trump also aims to reindustrialise America and protect jobs. However, this takes time. If an American T-shirt seller is suddenly slapped with a massive tariff to import goods, they have to either take the cost, which will eat into their profits, or they have to find alternative suppliers within the U.S. This is an example of a sector where the U.S. has hardly any footprint. It’s here where businesses and then consumers will shoulder higher costs. Eventually, this could lead to reindustrialisation, but not overnight, and not without deep pain for these industries and higher costs.

closeup of hanged shirts on rack — Photo by Parker Burchfield on Unsplash

Trump is typically a man who has also opposed the age of globalisation. In the past, he has frequently criticised some of the key features of globalisation, such as the former North American trade deal NAFTA and the World Trade Organisation.

As a result of his views, and with him back in the White House for a second term, we’ve seen big shifts to the global trade environment. What actions has Trump taken on the tariff front since his return to the White House?

Trump’s Early Tariffs

Since entering office on January 20th, Trump has enforced and utilised tariffs multiple times.

When Colombia refused to take a plane of deportees, Trump put 25% tariffs on them, which were rescinded once they accepted the plane.

He had spats with Canada and Mexico over the border crisis and fentanyl, at first threatening 25% tariffs on both before finally getting what he wanted and delaying them for a month. He then eventually put the tariffs on Canada and Mexico anyway. Another victim of his tariff regime has been China, which has promised reciprocal tariffs. He has also placed tariffs on Venezuelan oil and threatened Russia with tariffs if they don’t agree to a ceasefire deal in Ukraine. When Trump is uncertain, his mind goes to tariffs as a negotiating tool.

He also added 25% tariffs on steel and aluminium, and 25% on all foreign-made cars is expected at a later date. Semiconductor tariffs are also coming in the next few months.

But all this occurred before the big day at the beginning of April. On April 2nd, Trump unveiled his largest tariff package on what he dubbed “Liberation Day”. Unfortunately for Donald, it seems the only thing he set free was the stock market, as it plummeted over the next few days. What did Liberation Day look like? And what were the initial takeaways from its implementation?

Trump’s Liberation Day

Before diving into the specifics of the tariffs, let’s consider who such tariffs would impact the most. Since tariffs are charged on imports, let’s explore where the United States imports from.

These are all the nations where the share of U.S. imports is the largest. Hence, if any of these nations are hit by large tariffs, it’s here where the biggest impact will be felt by American importers. With this in mind, the most notable tariffs from Trump’s rampage are:

Most of the other nations not mentioned here incurred a tariff of 10%. There are some specific cases, such as Russia, North Korea, and Iran, where trade is so limited by sanctions that no tariffs were enforced.

My first takeaway was that this tariff strategy looks extensive. Of the largest importers, the EU has a 20% tariff, China has 34%, which, as I’ll discuss over the coming posts, has since risen substantially. Mexico and Canada were excluded from the Liberation Day tariffs due to the previous tariffs of 25% enacted on them. Vietnam is at 46%, Thailand on 36%, Taiwan on 32%, India on 26%, South Korea on 25%, and Japan on 24%. This completes the tariffs on the top U.S. importers, and none are below 20%. When 10% across-the-board tariffs were given to some nations, these are steep tariffs on some of the U.S.’s biggest trade partners. American businesses would hence see large increases in the cost to import from these nations.

Economists stated that the chance of recession in the U.S. has risen from 40% to 60%, and that this likely wouldn’t be weathered without adverse effects for the rest of the world. Since the U.S. economy is around 26% of the world economy in nominal terms, it makes sense that negative impacts in the United States would naturally have ripple effects.

Trump’s tariffs aren’t only realigning the world of global trade and finance, but they are also leading to geopolitical alliances between nations that don’t typically align. China, Japan, and South Korea have announced plans to respond to Trump’s trade policies together. Typically, the U.S. aligns with South Korea and Japan against Chinese influence in the Indo-Pacific, but now Trump has set the table and pulled out the chairs. We have also seen phone calls between the EU and Chinese officials. In the capitalist developed world, people need things. Even if businesses do take on these higher tariff costs and physical supply chains aren’t heavily affected, there has been a psychological impact here. Trust in the United States will be falling, and hedges will be made against its volatile foreign policy. Redrawing these trade connections will not occur immediately. But if the Americans are seeking to negatively affect the nations around the world through reduced trade with them, these nations could look elsewhere.

This brings up the question: Who is in the better position? Trump painted himself as a strong man, but could his nation weather such tariff storms? What does the world need the United States for, and does Trump actually hold all the cards?

lightning strike at night — Photo by Max LaRochelle on Unsplash

Who Needs Who?

The United States is one of the largest consumer markets in the world. Before this tariff episode, the U.S. acted as a final buyer of goods from export-led economies, such as China, Vietnam, and Mexico, which contributed to the high U.S. trade deficit. If this consumer demand suddenly fades due to higher import costs, these manufacturing economies would be hurt. This could well be a purposeful strategy that the U.S. is pursuing in a superpower geopolitical tussle against China. The Chinese are currently trying to pivot to a more consumer-based economy in light of their real estate struggles and stagnating consumer spending, which are leading to deflationary pressures.

The dollar is another reason the world needs the United States, but I’ll delve deeper into this over the coming weeks. Innovation, capital flows, investment, and intellectual property also place the United States close to the top of the financial food chain.

Different regions of the world also rely on the United States for things outside of trade and finance. European security was backed by the United States. Now it’s clear that they won’t do this anymore, Europe has to figure out its own security. The United States also ensures free navigation of global waterways. As the Signal Leak implied, they want other nations, such as Egypt and the nations in the EU, to step up and harness some of this effort. Bear in mind, not many nations have the capability of navigating the world’s oceans as the U.S. does, and so enforcing such a ruling would be difficult, even if Egypt or the EU wanted to.

With all these threads in mind, there are so many strings that could shift due to these tariffs. It’s clear that the United States has some very favourable cards, but in the superpower realm, China has extensive control over the world’s periodic table.

We can’t foresee where this will go, but it’s worrying that both sides have strategies that can seriously hurt the other. As the most important trade relationship in the world, this could have worrying consequences.

As we know with hindsight, many of the Liberation Day tariffs were paused, but the U.S.-China trade war is on centre stage, and it will remain there for some time.

white Casio calculator — Photo by Annie Spratt on Unsplash

Concluding Remarks

Today, I started my deep dive into Trump and his tariffs. This post initially was far too long, and so a discussion on the equation used to formulate the tariff plan and what happened after Trump announced a 90-day pause will come in Thursday’s post. After that, I’ll explore the impact this has had on financial markets, before exploring longer-term issues, such as the dollar as global reserve currency and the rise of an alternative Chinese-led global system. Keep an eye out for this over the coming days and weeks. I also explored an extensive list of sources for this post and the few that will be released over the coming weeks. If you’re looking for more clarity on what is a very volatile, confusing situation, these sources have helped me, and I hope they could help others. You can find them at the bottom of this post.

News In Geopolitics This Week:

Africa

Africa’s Trade Envoy To Visit The U.S.

Asia

Europe

Middle East

North America

South America

Other

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Sources:

https://www.bbc.co.uk/news/articles/c5ypxnnyg7jo
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https://www.bbc.co.uk/news/articles/c93gq72n7y1o
https://www.axios.com/2025/04/03/trump-tariffs-formula-calculated
https://www.inc.com/chris-morris/jpmorgan-says-there-will-be-blood-as-stocks-tumble-and-recession-odds-grow-to-60-percent/91171946
https://www.bbc.com/news/articles/c93gq72n7y1o
https://www.rand.org/pubs/commentary/2025/02/focus-on-the-new-economy-not-the-old-why-chinas-economic.html
https://www.cnbc.com/amp/2025/04/08/trump-tariffs-live-updates-stock-market-china.html
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