Trump's tariff gambit: Economic peril or political posturing?
"The dumbest trade war in history" - this is how the editorial board of "The Wall Street Journal" describes Donald Trump's decision to impose tariffs on Mexico, Canada, and China in its article. "WSJ" writes bluntly: the justification for this move, given by the US president, "makes no sense." Experts and other media are also critical of the new trade war.
The editorial board of "The Wall Street Journal" is a body that manages one of the world's largest business media and ensures journalistic standards. The board rarely officially expresses opinions on current topics, but this time it decided to speak out.
"The Wall Street Journal" harsh on Trump
The editorial board of "WSJ" titled their article on Trump's imposition of tariffs on Mexico, Canada, and China "The Dumbest Trade War in History". As they point out, Mexico and Canada - the US neighbours - will face tariffs of 25%, while China, "the real opponent," only 10%.
"Mr Trump’s justification for this economic assault on the neighbours makes no sense." White House Press Secretary Karoline Leavitt says these countries "allowed drugs to flow into America." But "drugs have flowed into the US for decades, and will continue to do so as long as Americans keep using them. Neither country can stop it," writes "WSJ".
The journal further indicates that drugs may be just an excuse because "Trump has made it clear that he likes tariffs for tariffs' sake". "President Donald Trump is on the verge of hitting America's three largest economic partners, which is a much more aggressive use of his favourite tool than anything he did in his first term," emphasizes "WSJ".
America self-sufficient? "We don't want to live in such a world"
The editorial board also noted that Donald Trump sometimes believes that the U.S. has no need for imports and could function as a completely self-sufficient economy, producing everything domestically. The editors of The Wall Street Journal pointed out that this concept, known as autarky, does not reflect the reality of the modern world or the kind of global economy most nations aspire to, something Trump may soon realize.
They point out that the American automotive industry relies on imports: 13% of parts were imported from Canada in 2024, while 42% came from Mexico. A single vehicle during its production effectively crosses borders several times. "And everyone benefits from this," adds the editorial board.
The newspaper editorial board suggested that Trump might claim victory and step back if he secures favourable negotiations. However, if the North American trade war continues, it will go down as one of the most ill-advised in history.
Additionally, the article underscores that such actions should not occur while the trade agreement between the three countries, negotiated by Trump during his first term, remains in effect. The Wall Street Journal pointed out that the U.S.'s disregard for its own treaty commitments, even with allies, would discourage other nations from cooperating.
The newspaper's editorial board suggested that Trump might claim victory and step back if he secures some negotiation wins. However, if the North American trade war continues, they argued, it would go down as one of the most misguided in history.
Experts: suicide, high-stakes gamble
Experts quoted by CNN also view Trump's decision as highly risky. Mary Lovely, a researcher at the Peterson Institute for International Economics, described it as possibly the most self-destructive move yet. She characterized tariffs as a high-risk gamble that could lead to economic slowdown and rising inflation.
CNN notes that the current tariffs will hit goods worth £1.1 trillion, which is three times the coverage of tariffs from Trump's first term (about £300 billion).
Lovely is convinced that tariffs will lead to price increases for consumers - especially in the case of food and building materials. However, this will not occur abruptly but gradually.
Christine McDaniel, a former trade official in the George W. Bush administration and now a researcher at George Mason University's Mercatus Center, notes that Trump's decision will weaken North America's economy. "Why would you want to burn your own house down?" she asks rhetorically, as quoted by CNN. RSM's Chief Economist, Joe Brusuelas, summarizes the situation briefly: "The administration is playing with fire."
Donald Trump imposes tariffs on Mexico, Canada, and China
Let us recall that on Saturday at 16:00 GMT, Donald Trump announced in his post on X that he had already officially imposed 25% tariffs on products from Mexico and Canada. This second country will also be subject to 10% tariffs on energy resources. At the same time, the USA is also imposing 10% tariffs on products from China. As Trump explained, he did this due to the threat of illegal immigration and the influx of drugs, including fentanyl, to the United States. As he argued, all three countries are not making efforts to curb this process.
It is worth noting that economists say the moves against China could have significant consequences for the USA. "If the US imposed an additional 10 percent tariff on China and China responded in kind, US GDP would be $55 billion less over the four years of the second Trump administration, and $128 billion less in China," the American Peterson Institute for International Economics estimated in a report quoted by CNBC.
