Trump’s sweeping tariffs undermine decades-old global trade system
President Donald Trump’s wide-ranging tariffs announced on Wednesday are designed to project strength, raise revenue for tax cuts and revive US manufacturing. But skeptics say the tariffs will pull the rug out from under a global trade system that — despite its flaws — has delivered prosperity for many global players for decades. Host Carolyn Beeler discusses the implications with Ian Bremmer, president of Eurasia Group, an international consulting firm.
This week, US President Donald Trump announced sweeping new tariffs on countries around the globe. He said it’s time to stop what he called the “looting, pillaging, raping and plundering of the United States.”
The tariffs and the president’s language provoked concern, dismay and countermeasure threats worldwide.
European Union President Ursula von der Leyen urged the international community to be prepared for the likely consequences of the levies.
French President Emmanuel Macron has urged French companies to pause all US investments, which economists say could have a major impact on the US tech industry.
Brazil’s Congress unanimously passed a reciprocity bill allowing the government to retaliate against any country or trade bloc that imposes tariffs on Brazilian goods. Lawmakers there made fiery speeches slamming interference in their economy.
And Britain’s prime minister called the tariffs the beginning of a “new era”, while Australia’s prime minister, Anthony Albanese, was blunt, saying, “The [Trump] administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend.”
The leaders of Britain, Canada, Mexico and a host of other countries also condemned the tariffs. Even sub-Antarctic islands uninhabited by humans were slapped with 10% tariffs in Wednesday’s announcement.
This could all prove disruptive to a global trade system that has existed for decades. The World’s Host Carolyn Beeler spoke to Ian Bremmer, president of Eurasia Group, an international consulting firm, to discuss the impacts of the Trump administration’s move and the future of the global trade system.
Carolyn Beeler: Ian, are we witnessing the dismantling of that system? And if we are, what might replace it?
Ian Bremmer: In terms of the post-war consensus, it was the United States driving globalization and supporting US-led multilateral institutions, the Bretton Woods, so-called, institutions — the IMF, World Bank, World Trade Organization — that meant that we wanted low tariffs, free trade and people and goods and ideas and services and capital moving faster and faster and more efficiently, across borders, all over the world. And the idea was that that was driving an incredible amount of economic growth and opportunity.
The US is now breaking with America’s trade policy in a way we haven’t seen in more than a century. Can you talk to me about exactly what the Trump administration’s approach is and what the norms and precedents are that are being thrown to the wayside here?
First, it’s been coming for quite some time. You’ve had a lot of Americans feeling like, “Well, maybe the US economy as a whole is doing well. Maybe the stock market is doing really well. But I’m not doing very well.” The middle class is hollowing out. The working class is hollowing out. You know, “My job has been exported. Who’s taking care of me?” And certainly, the US, as one of the most unequal societies economically among all the advanced industrial democracies, led to a bunch of Americans voting against free trade. President Trump has been talking a lot about putting a tariff wall around the United States, and using tariffs to rebalance the global economy toward America. More capital investment in the United States. More support for labor, working class and the middle class in the United States. And if that means that other countries will have to pay a lot of money to get goods into the US, so be it.
A shopping cart filled with groceries sits in an aisle at an Asian grocery store in Rowland Heights, Calif., April 3, 2025.Jae C. Hong/AP
So, who gets a leg up now or stands to take advantage of this new playing field as the US is moving out of what we could have called the center of this post-war economic order?
Well, some economies aren’t being hit as badly. I mean, certainly the UK, for example, is a winner compared to Europe. Mexico and Canada will eventually, through a lot of pain, I think, see a revised US-Mexico-Canada agreement. But the way you phrase that question implies that there are going to be winners. And the global economy is going to grow less. Costs of goods are going to go up; there’s going to be a lot more sand grit in the system. So, okay, accountants will do much better, lawyers will do much better. Political scientists will do much better. But the global economy will perform a lot worse. And that means Americans, but it also means everybody else. This is not an environment where you’re looking at winners overall. This is going to be a place where the costs will be spread out very broadly and for a long time.
Many economists are taking issue with how President Trump’s team calculated what he calls these “reciprocal” tariffs. Can you explain those calculations, how they arrived at the numbers of how much other countries were taxing US goods and help us understand if that’s a good way to look at it?
I was a little shocked by that. I mean, I’m watching this in real time, and I see that the Trump announcements of the numbers, the actual numbers are so much higher than the tariffs that those other countries apply on the United States. And he’s been talking for months about the need for reciprocal tariffs.
Reciprocal tariffs mean whatever they tariff you, you tariff them. That’s not what’s happening at all. So, we’re like, “Well, where do you get these numbers from? These are obviously made-up numbers.” It turns out … that what he’s looking at is the level of trade surplus that other countries are running compared to the United States, and he put a tariff measure in place. The reciprocity would reflect what you would need to tariff to get that trade relationship in balance, and then do 50% of that.
So, I mean, imagine a country like Lesotho. Why are they running a trade surplus with the US? Because their people can’t afford to buy American goods, right? I mean, it doesn’t make any sense. And by the way, for those countries that run a trade deficit against the US, reciprocity doesn’t mean that they don’t actually see higher tariffs or that the Americans bring them down. No, in this case, reciprocity is that the Americans are just going to put a 10% across-the-board tariff on you just because. So, it’s pretty dramatic.
Containers are stored at a container terminal in Duisburg, Germany, the day after President Trump announced new tariffs for the EU and the rest of the world, April 3, 2025.Martin Meissner/AP
So, these new tariffs from the US do not necessarily mean that the rest of the world can’t pursue a more inclusive, sustainable economy that allows for global growth. New trade relationships that are less dependent on the US might emerge. What are some of the scenarios that are realistically unfolding now here in the global economy?
Well, there’s going to be a lot of hedging in the near term. Those economies that can de-risk away from the United States, to save money and avoid tariffs, will. I’ve had many European leaders call me, many other leaders from the Global South call me, talking about de-risking from the United States.
But let’s keep in mind, the US is the largest economy in the world. It has the largest military in the world, and that military is essential for a lot of countries that are aligned with it. The US also has the hyperscalers for technology and AI. Those are not substitutable by other countries.
So, there are a lot places where the US relationship will be very sticky. There are a lot places where US market power will really matter. And so, you’ll also see countries that will try very hard to cut deals, and try very hard to increase investment and manufacturing and the like inside the United States, despite the cost.
Parts of this interview have been lightly edited for length and clarity.
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