US presidents from Ronald Reagan to Bill Clinton and George W Bush have used the White House Rose Garden to celebrate significant moments in America’s drive to liberalise the global economy.
But on Wednesday, Donald Trump chose the venue to announce steep new tariffs on all imports with extra penalties for many of America’s top trading partners, erecting a protectionist barrier around the world’s largest economy in a watershed shift for US international economic policy.
“It’s our declaration of economic independence,” Trump said, holding up a poster with a list of top countries that would be hit by the tariffs. “For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense, but now it’s our turn to prosper,” he added.
As the White House appears to lurch towards some form of new American autarky, a crucial question is whether Trump will be able to sustain these aggressive trade policies for an extended period or will eventually reverse them under the weight of economic, market, political and even legal pressure. S&P 500 futures were down 3 per cent after Trump’s announcement.
While scepticism around global trade has been building in the US for the past decade, and Trump himself put levies on hundreds of billions of Chinese goods during his first term that were retained by Joe Biden, the US president has now moved well beyond solely targeting Beijing.
Trump is now ushering in greater economic separation from a much wider range of countries, including Japan and South Korea and the EU, dramatically raising the stakes — and the potential for economic damage.
“If you impose tariffs on one country, like China, at least you have other markets available to you. If you impose them on everyone, then you have only your own market to rely on,” warned Richard Fontaine, president of the Center for a New American Security, a Washington think-tank.
“Over history, countries have tried that and usually ended up giving themselves lower economic growth, lower employment, higher prices, less quality,” he added.
“I hope that [Trump] will roll some of this back, because I think it combines an economic policy that is not productive with a foreign policy that is not productive,” Fontaine said.
Even though the president campaigned on hardline trade policies during the 2024 election — as he did in 2016 — his determination to make high tariffs his top economic priority in the first months of his second term has been striking.
White House officials stressed they were pushing for structural changes to the global economy to correct problems that will be hard to overcome, ranging from high tariffs around the world to currency and tax policies, intellectual property theft and even health and labour standards.
“Today we’re in one era, and tomorrow, we will be in a different era. No one’s done anything quite like this,” one White House official told reporters on Wednesday afternoon.
The sprawling nature of Washington’s complaints has dashed hopes that the president could be appeased with a quick agreement and a few cosmetic policy changes — the most benign scenario for investors, large businesses and foreign officials.
“The notion that tariffs would be used simply as an instrument to negotiate short-term deals and to get wins on the board should be dismissed,” said Myron Brilliant, a senior counsellor at DGA-Albright Stonebridge Group, a Washington consultancy.
“It may be a component of the strategy, but it’s not the central component. I think the underlying mission that the president and his team is deploying is to, in their mind, ‘level the playing field’ and extract a price for that,” he added.
Trump has also appeared to be less disturbed by market turmoil and the potential for economic pain than he has in the past, which may mean he will stick with the tariffs for longer.
Some officials within the administration, such as Peter Navarro, the president’s hardline trade adviser, are emphasising the need for the levies to generate long-term revenue of as much as $600bn a year, which could pay for other economic plans, including planned tax cuts.
But that does not mean the administration’s tolerance for its own tariffs will be unlimited, particularly if trading partners respond by threatening or imposing retaliatory measures — as some already have — that will compound the economic impact.
A scramble among business executives, lobbyists, foreign leaders and diplomats to plead for exemptions and carve-outs is widely expected in the wake of Wednesday’s announcement, leading to painstaking, tense talks with potentially uneven outcomes.
For now, however, a White House official said they were mainly “focused on getting the tariff regime in place”. The baseline tariff on all imports of 10 per cent, which Trump had first floated on the campaign trail in August 2023, will take effect on April 5. The additional, so-called reciprocal levies will be imposed on April 9.
The Trump administration said the tariffs could be reduced if trading partners took “significant steps” to change their policies, but also that they could increase if trading partners retaliated.
“My advice to every country right now is, do not retaliate, sit back, take it in, let’s see how it goes,” Scott Bessent, the Treasury secretary, told Fox News. “If you retaliate, there will be escalation. If you don’t retaliate, this is the high-water mark.”
The tariff push could be complicated by a legal challenge to Trump’s use of emergency powers to impose the levies. “We don’t know how the courts would respond, but I’m confident it will be tested,” said Everett Eissenstat, a former Trump trade official now at Squire Patton Boggs, a law firm.
But the main factor that could cause Trump and his team to have second thoughts about their new trade policies may well be raw politics. A plunge in the president’s approval rating or fears on Capitol Hill that Republican majorities in both houses of Congress could be at risk in the 2026 midterm elections could prompt a rethink.
“If members of Congress start to feel the pain because their constituents are yelling about higher prices . . . it may have some impact on the president, who has a big growth agenda ahead that he still wants to move on. I don’t think it’s going to be allies or others complaining about market disruptions,” said Brilliant at DGA-Albright Stonebridge Group.
But for now, in Washington as much as in board rooms and capitals around the world, the impact of Trump’s construction of a high fence around the American economy is still being digested and appears fraught with peril.
“We have no idea what broad-based tariffs of this sort are going to unleash . . . the world has not seen tariffs like this in the modern era of trade integration,” said Edward Alden, a senior fellow at the Council on Foreign Relations.
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