By Kendrick Low
Unfortunately, Trump is back on the ballot box for the 2024 election season. But just how bad will Trump’s potential re-election be, and what are the potential consequences and effects it could have on not just the US, but the economy of the entire world?
Trump seems to have an unsettling penchant for trade wars, and is truly the opposite of risk-averse. Trump has previously already initiated some, such as the tariffing of Chinese goods during his tenure as president. But now, he has gone a step further. As the self-proclaimed Tariff Man, he aims to impose a general 10% tariff on all imported goods and products, according to the Wall Street Journal and CNBC. But such actions would certainly make him not America’s hero, but rather the world’s villain. Trump, too, has publicly commented on his ideas of ‘eye-for-eye’ tariffs, essentially akin to a trade war.
And the effects of this, needless to say, are detrimental and potentially devastating to the global economy at large. According to the Centre for Strategic and International Studies, such actions would hardly be advised from a macroeconomic standpoint. This would cause inflation to increase in the US itself, not least because it allows domestic rivals to foreign exporters to simultaneously increase prices. From a supply-side perspective, it would increase business costs substantially and as such cause more cost-push inflation or make US businesses far less competitive than foreign counterparts. Politically, this would violate World Trade Organisation rules and enable other WTO members to further tariff the US for such protectionist measures; Trump, being Trump, would as such probably withdraw from the WTO and retaliate further, causing multilateral cooperation to shatter, and prompting a ‘full-scale trade war’ between the Trump administration and the WTO.
Apart from such effects, Trump is also aiming, rather critically, to do what others could not- to end the Ukraine war in 24 hours, as part of a public television statement on (naturally) Fox News. Unfortunately, the potential president could end up halting funding to Ukraine, throwing it to the hungry wolf that is Russian President Vladimir Putin, due to the huge costs the US is incurring for its continued support for Ukraine via aid packages, weapons and more.
It certainly is not looking good for Ukraine. Trump stated that he ‘know[s] Zelensky well’, and Putin ‘even better’. To reduce the economic burden, it is unsettlingly likely that he will cease to support the war. And this would destroy Ukraine’s economy and cause food prices to surge further, owing to the fact that Ukraine is a large exporter of grain, further inciting supply shocks and inflationary pressure for the economy overall.
Furthermore, Tariff Man has begun making overblown, ostentatious claims that he was able to use the threat of tariffs as an effective deterrent. Trump allegedly states that he warded off Macron from imposing tariffs on US products with a retaliatory tariff on French wine. Pity it never actually happened. How are US citizens meant to trust a president that shamelessly lies about the efficacy of his policies?
In fact, Trump’s ‘deterrent’ tariffs would not merely cause relations with other countries to deteriorate, but even alienate the US from global blocs. With the EU and other countries now taking Trump’s bluster seriously after grossly underestimating his degree of arrogance during his first term, if he comes to power, according to the STraits Times, Trump will lose diplomatic support from strong forces such as the EU, weakening the power of NATO(North Atlantic Treaty Organisation) and causing the EU to move closer to the UK as an alternative. Such fractures in global ties would inevitably prompt the shifts of supply chains to decouple from the US, reducing its share of world trade and leading to trade deficits. It also means the EU will not necessarily follow the US’s lead when dealing with China in its foreign policy, and as such won’t damage its biggest rival as much as it hopes to achieve.
Clearly, while Trump’s economic policies may lead to certain benefits for US citizens, the international outlook in the case of him ascending to power is unfortunately not promising, a grim reminder of the sheer power the US wields, especially when commanded by the wrong man- and a less-than-popular Democrat is the only salvation to escape from the ramifications of a return of Tariff Man, with Trump easily leading in the Republican primaries and will undoubtedly be the Republican candidate for the 2024 election.
Key Takeaway Points(or TL;DR):
Trump would impose significant tariffs that would lead to substantial rises in inflation as well as inciting several trade wars, damaging the global economy
Trump’s diplomatic policies would hurt the entirety of Europe if he tries to cut costs via sacrificing Ukraine, leading to higher inflation along with weakened and pressured supply chains
Trump unsurprisingly lies about the effect his tariffs would have in attempts to please his right-wing audience
Trump’s tariffs and America First policies would alienate the US from Europe and pull Nato apart, causing Europe-based supply chains to break off from the US and Europe to stop following the US policy on China|
The only thing blocking Trump’s rise to power is Biden, who many view as unstable, debilitated and unfit for presidential power.
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