Simon Pearson

Trump’s Tariff Fantasy

April 4, 2025

The Trump administration’s latest tariff proposal assumes that other countries will quietly absorb the cost of import duties. But tariffs don’t work like that. They never have.

It’s not entirely clear whether Trump’s new tariff plan is meant to be taken seriously or just truth social into existence like everything else in this administration. What we do know is that it rests on a fantasy: that other countries will quietly absorb the costs of US-imposed tariffs while continuing to export their goods to American consumers at no extra cost. It is, as with so much else in the current American political landscape, a policy built on vibes rather than political economy.

The latest scheme involves a blanket 10 percent tariff on nearly all imports, with much steeper rates for so-called “worst offenders” that is, countries running trade surpluses with the United States. The logic, if one can call it that, is that these countries will be so desperate to maintain access to the US market that they will slash their prices, eat the costs, and keep the American consumer happy. This is not how trade works. It is not how it has ever worked.

There is no real precedent for this kind of externalisation. Tariffs, by definition, are paid by importers. When a Chinese firm sells solar panels to the United States, and Trump slaps a 60 percent tariff on them, it’s not Beijing that writes the cheque—it’s the American company at the port of entry. That cost is then passed down the line, usually to the end consumer. Prices rise, purchasing power shrinks, and the populist illusion of protecting American jobs starts to wear thin.

The Trump campaign claims this is about “fairness.” But fairness, in their lexicon, always means obedience to American economic dominance. Countries that do not retaliate will be rewarded with trade deals; those that do can expect further punishment. It is a gangster model of diplomacy: nice access to the American market you’ve got there, shame if something happened to it.

There is a precedent, of sorts: Trump’s first term saw a slew of tariffs against China, which led to higher costs for American firms, an enormous subsidy package for farmers hit by retaliation, and a phase-one trade deal that fell apart almost immediately. Even then, Beijing didn’t “absorb” anything. They retaliated strategically, recalibrated their supply chains, and made deeper inroads into global South markets. The idea that, in 2025, the rest of the world will simply roll over feels less like strategy and more like delusion.

That delusion is rooted in a deeper assumption that runs through much of contemporary US policy: that the rules of global capitalism can be rewritten unilaterally. That America can remain the consumer of last resort, issuing dollars and dictating terms, without having to deal with the consequences. But we are long past the Bretton Woods moment. China, India, Brazil, and even the EU are increasingly less willing to play Washington’s game.

Trump’s economic nationalism is not a plan. It is a mood, a posture, a PR stunt masquerading as policy. And yet it may well prove effective at the level that matters most in the American electoral system: the spectacle. It allows Trump to talk tough, demonise foreigners, and gesture towards a revitalised American industrial base, all while doing nothing to address the material foundations of economic decline. No jobs are coming back. No new factories are opening. What’s being manufactured is consent, at scale, by a machine that knows only how to campaign, never how to govern.

In the end, it is not that the rest of the world will absorb the costs. It is that American consumers, once again, will be made to foot the bill, for the tariffs, the inflation, and the political illusions of empire in decline.

Donald J Trump, Economics, tarrifs, United States of America

Trump’s Tariff Fantasy

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