Trump gets his way on tariffs, but global trade system intact for now

U.S. President Donald Trump hits dozens of countries' goods with steep tarrifs, experts suggest the broader global trade system is likely to weather the storm for now. In what analysts describe as a continuation of his protectionist economic stance, Trump has succeeded in pressuring countries like Japan, the Philippines,         Indonesia and the European Union into striking new trade deals with Washington. However, for dozens of others including India, South Korea and Taiwan “reciprocal” US tariffs are set to rise sharply starting August 1, increasing from 10% to significantly higher rates. 

The moves form part of Trump’s broader trade war strategy, built on the belief that America’s trade deficits reflect unfair practices by its partners. During his 2024 re-election campaign, Trump repeatedly declared, “To me, the most beautiful word in the dictionary is ‘tariff.’”

Since the signing of the General Agreement on Tariffs and Trade in 1947 later succeeded by the World Trade Organization, global trade policy has largely centered on reducing tariffs to promote economic growth and integration. The WTO now boasts 166 members covering 98% of global commerce. 

“What we've learned in the postwar period is that lower tariffs are better for the prosperity of your own country,” said Richard Baldwin, professor at IMD Business School and former economic advisor to U.S. President George W. Bush. And it's also good if other countries lower their tariffs, so we have a vibrant international economy.”

However, Trump’s strategy breaks from that consensus, and economists are watching closely to gauge the fallout.