US President Donald Trump issues threats so often without ever backing them up or doing something else entirely, all while claiming he lived up to the threat, that it can make keeping up with the ‘threats’ seem like an exercise in futility. Why, then, bother keeping up with all the threats? Well, once in a while, President Trump actually makes good on his word and, this time, he has done so in a very big way. On Wednesday (April 2), the US president made good on his threats to impose heavy tariffs on a range of nations he accuses of ‘ripping off’ his country. They include new tariffs of 34 per cent on imports from China, 20 per cent on imports from the European Union, 24 per cent on Japan and 26 per cent on India. These are some of the largest US trading partners, with the EU being the largest in terms of total trade and China being the fourth largest. But the tariff onslaught has not been limited to major US trading partners and it seems that pretty much every country with a trading relationship with the US, no matter how small, has been targeted with tariffs of at least 10 per cent. Pakistan is one such country, incurring ‘reciprocal tariffs’ of 29 per cent, which is quite a steep rate for a country that is not even among the 30 largest US trading partners.
While the tariffs have been dubbed as ‘reciprocal’, some analysts have disputed whether they are indeed proportional to the barriers erected against US goods by the targeted countries. It should also be pointed out that countries not included in this round of tariffs, most notably Canada and Mexico, have already been targeted for levies previously and that these latest tariffs will also be accompanied by sweeping 25 per cent auto tariffs announced earlier. In the wake of the tariff announcements, stock markets sank around the world and several experts are predicting that the US will suffer as a result of the tariffs, which could raise inflation and also damage Trump politically. However, the US president has never been the sort of person to shy away from doing self-damaging things and his political success is a testament to his ability to get away with doing just that. More intriguing is why the world’s self-proclaimed champion of free trade and capitalism has soured on these concepts, twice electing a man who proclaims his tariffs to be a new ‘liberation day’ for the US.
The massive de-industrialisation of the US and resulting unemployment and inequality in formerly manufacturing-heavy regions like the Midwest is a big part of the story. Many Trump voters are the men and women who used to make things in America and long for a return to ‘Made in the US’. However, the tariffs are also fuelled by darker impulses. One is the natural US inclination to be mistrustful and suspicious of foreigners despite seeking to be the world’s standard bearer of human rights and tolerance, often lecturing other nations as part of this role. How else does a country like Pakistan, hardly a US trade competitor, find itself on this list? But complaining about the unfairness of the tariffs will not do much good at this stage. With China and the EU already vowing countermeasures, it seems as though we are on the brink of a global trade war -- unless Trump makes a U-turn. Pakistan, still heavily dependent on imports, is quite exposed to global fluctuations in prices and trade becoming generally more expensive. The imperative to grow the country’s own industry has never been stronger.