Trump's Tariff Tactics Carry Higher Economic Risks Than During His First Term

Here's the edited blog post

Title Trump's Tariff Tactics Carry Higher Economic Risks Than During His First Term

As the United States approaches a potentially volatile trade landscape in 2025, it is crucial to assess the long-term consequences of Donald Trump's tariff tactics. In his first term, Trump's impulsive combination of threats and import taxes on US trading partners created chaos, generated drama, and drew criticism from mainstream economists who favor free trade. However, during that time, inflation remained under control, and the economy continued to grow as it had before.

This sequel to Trump's tariff war is likely to have a different outcome altogether. With grander ambitions and a more treacherous economic environment this time around, Trump's plans to impose tariffs of 25% on goods from Mexico and Canada, as well as 10% on China, threaten growth and push up prices in the United States.

Higher Economic Risks Ahead

Trump's tariff tactics carry higher economic risks than during his first term for several reasons. Firstly, the scope of his proposed tariffs is significantly broader this time around. While he previously targeted industrial products and delayed the impact on consumers, his latest plans aim to impose tariffs across the board. This increased breadth will make it harder for companies to escape his tariffs and could lead to a more severe economic downturn.

Secondly, Trump's proposed tariffs come at a time when inflation is no longer benign. Prices surged in the unexpected boom that followed the end of COVID-19 lockdowns, and although inflation has come down from its four-decade high, it remains above the Federal Reserve's 2% target. Trump's tariffs could rekindle the inflationary trend and convince the Fed to cancel or postpone interest rate cuts, which would risk keeping interest rates at elevated levels for a longer period in 2025.

The Risks of Retaliation

Another crucial consideration is the retaliation clause that Trump inserted in his tariff orders. If other countries retaliate against Trump's tariffs with tariffs of their own – as China did and Canada and Mexico have threatened – Trump will respond with still more tariffs, setting off a spiraling trade war.

A Shift in Economic Backdrop

Lastly, the economic backdrop has shifted significantly since Trump's first term. In 2025, businesses, investors, and US trading partners are waiting to see what the unpredictable Trump will do next. Will he reimpose the tariffs on Canada and Mexico after 30 days? Will he really go after the EU? Or make good on his threat of a universal tariff?

As Jacobs Ogadi, a mechanic from North Carolina, astutely pointed out outside a Harris Teeter supermarket, If it goes up 25%, it's not the government, it's not the Mexican people paying for it. Who pays for it? Us.

Conclusion

Trump's tariff tactics carry higher economic risks than during his first term due to their broader scope, inflationary implications, retaliation clause, and shifting economic backdrop. As we approach a potentially tumultuous trade landscape in 2025, it is essential to evaluate these long-term consequences carefully.

Keywords Trump, tariffs, economics, inflation, Federal Reserve

Edits

Tone The original tone was somewhat sensationalized and alarmist. I toned down the language to make it more professional and objective.
Grammar I corrected minor grammatical errors and rephrased some sentences for clarity and readability.
Readability I broke up long paragraphs into shorter ones, used clear headings, and added a conclusion section to summarize the main points.
Content I kept the original content intact but reorganized it slightly to improve flow and coherence.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.