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What Happens When Trump’s Tariffs Collapse World Trade? [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-04-03
The US is now on course to abandon the world order it created. Global trade depends on the US protecting sea lanes, allowing imported goods and likewise supporting open markets around the planet. Global trade also depends on the dollar as a world currency. That is all in question now.
As the world reacts to Trump’s tariffs, the dollar is plunging and stock markets are losing value.
What is the end game? Trump thinks he has a great source of federal income in tariffs, so that he can continue tax cuts for his fellow billionaire and multi-millionaire elites. Never mind that he is creating a recession that will lower tax receipts for the government.
Trump also thinks he is creating incentives for bringing back manufacturing to the US. Never mind that he has no programs to support development of any industry in the US, and is instead cutting off programs to support infrastructure like broadband and electric vehicle charging. Yes, tariffs can lead to increased domestic production if you give potential manufacturers time to plan for the future: locate facilities, buy the equipment, source the suppliers and hire and train a workforce. This could happen with incremental tariffs on select goods so that you can promote the production of the corresponding items at home. Tariffs could be ramped up to develop manufacturing capacity over the course of years. That could be part of a thoughtful industrial policy. Overnight tariffs are not!
What will be the end instead? Inflation? Unemployment? World recession? Collapse of the world trading order? Potential famine and worse? Peter Zeihan predicts all of this.
“The End of the World Is Just the Beginning: Mapping the Collapse of Globalization” by Peter Zeihan charts the course of the world economy when the US abandons its role in maintaining global trade. It is a very real prognosis now. However, Zeihan anticipated that the US would benefit from the continued advantage of our large regional trading system with Mexico and Canada. Canada is particularly important. Even that is now in jeopardy.
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[1] Url:
https://www.dailykos.com/stories/2025/4/3/2314286/-Trump-s-Tariffs-Invite-Inflation-Economic-Stagnation-and-World-Recession?pm_campaign=front_page&pm_source=latest_community&pm_medium=web
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