defeating war: Why tariffs won't Make America Great Again

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By Yi Xin (People's Daily Online) 15:33, April 23, 2025

On April 2, the United States escalated its trade war to unprecedented levels, imposing staggering tariffs of up to 125 percent on Chinese imports, among others. Global markets immediately plunged in response.

On paper, this aggressive move promised a triple victory for the U.S.: shrinking trade deficit, reviving domestic manufacturing, and filling government coffers with tariff revenue.

Yet none of these goals will materialize.

America's chronic trade deficits stem not from foreign competition but from its own economic imbalances. The U.S. economy is increasingly dominated by finance and tech on the coasts while manufacturing lags behind, forcing reliance on imports for everything from electronics to machinery.

Tariff cannot fix this. Real solutions—like education reform, technological innovation, and industrial upgrades—require long-term investment, not short-term trade barriers.

Worse still, these tariffs risk backfiring. Artificially high import costs could fuel inflation or even trigger a recession—hardly a path to "make America great again."

Globalization can't be undone by tariffs

Even before this escalation, The Financial Times warned, "Globalisation will triumph over Donald Trump." The reason FT gave is simple: "The U.S. now accounts for just 13 percent of global goods imports, down from nearly 20 percent two decades ago."

Economic gravity has shifted, and no amount of unilateral tactics can reverse it. By isolating itself, America risks being left behind as trade flourishes elsewhere.

The unintended consequences: Dollar's accelerated decline

Ironically, Washington's trade war may be hastening the very decline it seeks to prevent.

A 2023 J.P. Morgan analysis found growing signs of de-dollarization, with commodities like oil increasingly traded in non-USD currencies. Meanwhile, Global South nations are diversifying reserves away from U.S. Treasury bonds and adopting alternative settlement currencies.

This isn't just a minor adjustment—it's a historic shift. Much like the post-WWII transition from the gold standard to Bretton Woods, today's changes offer emerging economies a chance to redefine global trade dynamics and reduce dependence on the U.S.

The way forward: A new globalization

U.S. policymakers have fundamentally misjudged how global trade works. Whether America plays hero or villain, supply chains won't bend to political whims—nations trade based on efficiency, not allegiance. Policies divorced from economic reality rarely last, and tariff hike will be no exception.

The real opportunity lies not in protectionism but in collaboration. As Global South economies drive the next wave of globalization, the rest of the Western world has a choice to make: cling to a fading order, or partner with emerging markets to build a more resilient, inclusive system. The future of trade won't be dictated by tariffs—it will be shaped by those who adapt.

(Yi Xin is a Beijing-based international affairs commentator.)

(Web editor: Hongyu, Du Mingming)