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President Trump's Tariffs And The Big Bang Effect (1) - Independent Newspaper Nigeria

Published 1 month ago7 minute read

A peek into Canadian, Mexican, Chinese, European, Japanese, and Korean media platforms reveals palpable angst, driven by strong expressions of nationalistic passion against the 47th President of the United States, Donald J. Trump, and his administration. Citizens of these countries are expressing indignation due to the ongoing trade war—especially regarding the 10% across-theboard tariff on imports from 180 countries and, in some cases, additional tariffs of up to 54% on imported vehicles and other goods into the US from around 60 nations.

The tariffs took effect on April 2, a date President Trump has dubbed Liberation Day—drawing a parallel to July 4, 1776, when the original 13 American colonies declared independence from Britain after a brutal war.

In line with America’s foundational respect for freedom of speech and association, it’s remarkable—and indeed ironic—that, unlike other nations whose media are responding with patriotic fervor, the American media have not rallied behind their president. Instead of pushing back against foreign hostility, the highly vibrant US media have joined the global chorus in criticizing President Trump’s “America First” policies. In some quarters, they are even vilifying or outright demonizing their own president.

Such is the potency of free speech in the United States—a feature perhaps best captured by the concept of American Exceptionalism.

Despite a tumbling stock market and widespread protests fueled by fears of inflation and an impending recession—as predicted by anti-Trump politicians—President Trump appears unperturbed by the tumultuous effects his tariff policies are having on US trading partners. In fact, he has threatened to raise tariffs even further if Canada and European countries attempt to collude against the US. Although this has yet to happen, China—arguably the hardest hit—has retaliated with a 34% tariff on US imports.

In my view, these developments are reshaping the global trade ecosystem. As countries seek alternative trade partners to avoid the constraints of trading with the US on Trump’s terms, they may carve out entirely new trade pathways. Thus, the net effect of President Trump’s sweeping tariff hikes—targeting both allies and rivals—can be likened to the Big Bang.

The Big Bang theory, the leading explanation for the origin and evolution of the universe, posits that the universe began as an infinitely hot and dense singularity about 13 billion years ago. According to its proponents, this singularity expanded rapidly, cooling and giving rise to subatomic particles, atoms, stars, and galaxies. The universe, they say, is still expanding—accelerated by the mysterious force known as dark energy.

President Trump’s “bang” can be seen through a similar lens: an explosive policy shift—rooted in an unconventional America First ideology—that has disrupted all previous global trade arrangements. Like a singularity, his approach is transforming the established order, replacing it with an untested but highly consequential framework. Though unproven in the modern era, it already appears to be generating seismic changes across the global economy.

Trump is leveraging tariffs as a strategy to boost job creation and repatriate manufacturing to the US. He also views them as a tool to generate revenue to reduce the national budget deficit, which stands at a staggering $36 trillion and continues to grow.

Given the global upheaval triggered by this astronomical tariff increase, it is difficult to find a better metaphor for Trump’s trade policy than the Big Bang. The ripple effects are so powerful that fear has gripped not only North and South American neighbors, but also Europeans, Asians, Arabs, and Africans—on both sides of the Atlantic and Pacific oceans.

The only country that might remain untouched or unaffected by the far-reaching Trump effect is one operating in complete autarky—such as the reclusive regime of Kim Jong Un in North Korea.

While the Big Bang theory provides a comprehensive explanation for the origins of the universe, many unanswered questions remain—such as what caused the universe to begin expanding in the first place, and what is the true nature of dark matter and dark energy.

Similarly, what explains President Trump’s determination to upend the old world order remains an enigma to his opponents. At this point, not even his staunchest devotees can convincingly argue that his motives are purely patriotic, driven by the Make America Great Again (MAGA) ideology with the primary aim of correcting trade imbalances and closing the deficit gap that has led to a massive budget shortfall.

Of course, as is typical in opposition politics, Trump’s high tariffs and efforts to reduce the size of the US government—driven by the newly created Department of Government Efficiency (DoGE) under the leadership of Elon Musk, the world’s richest man—are being framed as a gambit to cut taxes for billionaires. That narrative seems to have resonated, as Americans have taken to the streets in protest, in ways that suggest resistance to what former President Joe Biden described as an “oligarchic regime,” citing the number of billionaires in Trump’s cabinet.

The reality, however, is that Trump’s “bang” is not a one-size-fits-all solution. It affects different countries and regions in different ways.

Starting with Africa, where aid is critically needed to manage persistent social and public health challenges like HIV/AIDS, the suspension of USAID funding by President Trump is deeply concerning. USAID has been a vital source of funding for health and humanitarian initiatives, and its absence poses a significant threat. This is especially so because many African leaders have practically abdicated their responsibilities in this area, relying heavily on donor countries—led by the US—to provide for their citizens.

With USAID funding now cut off, many African countries are left scrambling to fill the gap. In Nigeria, the government has made an extra-budgetary provision of $200 million for healthcare services, while the Central Bank of Nigeria (CBN) has injected almost $200 million into the foreign exchange (FX) market to help cushion the volatility and uncertainty resulting from the tariff hikes.

In Europe, the 25% tariff imposed on vehicles and alcoholic beverages—particularly from France and Scotland—poses a massive economic challenge. Many European economies are either already in recession or teetering on the brink. Even more alarming is the US threat to withdraw from its heavy financial commitment to NATO, coupled with demands that member nations pay up their dues. This creates a sense of vulnerability, especially as fears rise that Vladimir Putin may turn his attention to another European country after Ukraine.

From my perspective, the European Union’s support for Volodymyr Zelensky and Ukraine is less about altruism and more about self-interest—the first rule of nature. This is evidenced by the show of unity by European leaders around Zelensky after he was snubbed at the White House by President Trump and Vice President J.D. Vance. This strategic interest is also why Europe is now planning to set up a joint European military force as an alternative to NATO—an initiative already underway. But given the current economic strain on European economies, is the formation of a standing European force feasible?

Regarding the high tariffs, Europe appears to have adopted a measured response, likely in line with the counsel of Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO).

Hence, it seems to have adopted a studied approach.

The Arab world is also not left out. President Trump’s “drill, baby, drill” mantra means that the US will reduce its dependence on oil imports from countries like Saudi Arabia, the UAE, Kuwait, Qatar, and Oman. Instead of preserving strategic oil reserves, the US will now focus on domestic drilling. Trump’s rationale appears to be that if fossil fuels are eventually being phased out due to the rise of Electric Vehicles (EVs), then it makes sense to exploit the existing oil reserves before combustion-engine vehicles become obsolete.

In any case, Trump has never embraced climate change in the way it is currently framed. The world is alarmed that he has once again pulled the US out of the Paris Climate Accord, after former President Biden had rejoined during his administration. With oil prices crashing due to the tariff shock, an OPEC strategy meeting may soon be on the horizon.

China, currently celebrated as the world’s foremost manufacturing hub and the second-largest economy, has borne the brunt of Trump’s trade war. The 54% tariff imposed on goods ranging from vehicles to washing machines has essentially locked China out of the US market. These items were previously taxed at 10–25%, but after Trump’s April 2 Rose Garden announcement, the tariff soared to 54%. In response, China has imposed a 34% tariff on US exports. That has exacerbated the chaos already wracking the global economy in the past couple of days.

The rationale behind these tariffs, according to Trump, is to bring manufacturing back to the US from Mexico, Canada, China, and Europe, where it had migrated due to what he deems as unfair trade practices. His strategy is designed to reverse this trend.

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