A better alternative to Trump’s tariffs
To give meaningful relief to workers displaced by import competition, a targeted adjustment programme that combines retraining opportunities for younger workers and support for older ones would be more effective and less expensive
OVER the past 75 years, global prosperity, poverty reduction, and economic growth rates have reached unprecedented levels, largely driven by the open multilateral trading system. By lowering tariffs and reducing transportation and communication costs, this system has enabled efficient producers to access new markets in a competitive global environment, thereby fostering innovation.
But the multilateral trading system, which came under threat when Donald Trump won the 2016 US presidential election, is at risk of unravelling following Trump’s return to the White House in 2025. During his first term, Trump rejected the Trans-Pacific Partnership, renegotiated the North American Free Trade Agreement, and launched a trade war with China, sharply raising tariffs on Chinese imports, as well as on steel, aluminium, and other goods, often justifying these measures on national-security grounds.
Regrettably, President Joe Biden did not reverse Trump’s tariffs, jeopardising a system that had long benefited both the United States and the global economy. During his campaign, Trump pledged to impose a 10 per cent tariff on all imported goods and a 60 per cent tariff on all imports from China. He also threatened to keep raising tariffs until the US eliminates its trade deficit.
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