Businesses engaged in international trade are navigating a challenging landscape shaped by the Trump administration’s tariff policies.
While many might not agree with these policies, it’s essential for them to grasp the underlying rationale behind them, especially given their likely persistence.
At the recent World Trade Day event, trade expert Penelope Naas from the German Marshall Fund, referred to as a “tariffologist,” shared insights on the current tariff climate.
“So (trade) deals are something that can help adjust the tariffs, but again, 10% seems really sticky at the moment,” she noted, addressing attendees in Denver.
Recognizing that tariffs can provoke significant stress, the World Trade Center hosted a unique “Tariff Therapy Oasis” space for participants seeking relief.
During her presentation, Naas showcased a 1987 advertisement from the New York Times that Donald Trump purchased to criticize U.S. trade deficits, highlighting the continuity of his trade rhetoric over the years.
Trump’s repeated assertions involve the U.S. being taken advantage of by international partners and the notion that these nations fail to contribute adequately to military expenses for their protection.
According to Naas, Trump promotes four primary benefits of imposing higher tariffs:
1. They aim to reduce the trade deficit.
2. They encourage more domestic manufacturing.
3. They provide political leverage over trading partners and companies.
4. They generate revenue for the country, potentially aimed at diminishing budget deficits or funding policies like the recent tax cuts approved by the House.
Despite Trump’s firm stance, Naas emphasized that he is responsive to negative feedback from constituents, respected CEOs, and concerns voiced by Republican members of Congress, not to mention reactions from the bond markets.
She encouraged businesses to engage with their political representatives to reflect the impacts they are facing due to tariffs.
Notably, when JPMorgan Chase’s CEO, Jamie Dimon, warned in May about potential economic repercussions due to tariffs, the next day saw the administration announce a 90-day pause on reciprocal tariffs.
Similarly, when Walmart’s CEO raised alarms about serious supply issues resulting from tariffs as high as 145% on goods from China, the administration responded with a temporary reduction of those tariffs to 30% over a 90-day period.
The influence of industry leaders is palpable; for example, Apple CEO Tim Cook’s visit to the Oval Office underscored the challenges in manufacturing iPhones outside of China, resulting in significant tariff exclusions for smartphones and other electronics.
Conversely, policy changes can arise from unlikely sources as well. A 100% tariff imposed on films produced outside the U.S. followed a meeting where actor Jon Voight advocated for such protectionist measures to bolster Hollywood.
Nations like Canada, the European Union, and China have adeptly reacted to Trump’s concerns for his political base, strategically targeting tariffs on specific goods, such as Louisiana rice and Kentucky bourbon.
This tactic has complicated prospects for a swift resolution to trade tensions.
With over 60 countries affected by reciprocal tariffs, the administration is challenged by the complexities of negotiating multiple trade agreements simultaneously, which Naas pointed out as an issue exacerbated by staffing shortages.
Amidst these challenges, the broader goal reflects a desire for a reset in trade relations between the U.S. and China, a nation striving to assert itself as a global military power under President Xi Jinping while simultaneously dominating the manufacturing sector.
“China has taken over manufacturing around the world; while they consume about 55% of what they produce, they export around 45%. This dominance is adversely affecting the manufacturing capabilities of other nations,” Naas stated.
The U.S. stands particularly vulnerable to disruptions stemming from China across a range of products, including smartphones, computer monitors, video game consoles, energy storage systems, baby carriages, toys, and recreational gear.
Furthermore, China has emerged as a key supplier of essential components like antibiotics and rare earth minerals.
On the military front, while China’s military power is not yet strong enough to effectively confront the U.S. and Europe, it has adopted strategies intended to render any opponent “blind, deaf, and dumb” in the critical initial hours of conflict.
Naas also highlighted security risks in Chinese electronics—products like routers from TP-Link have allegedly been involved in cyberattacks, and electronic goods have been found containing embedded kill switches without clear innocuous explanations, notably appearing even in solar systems.
image source from：https://www.denverpost.com/2025/05/23/tariffs-trade-trump-adjustment/
