Tariff Dilemma Trio: Trump’s Policy Adjustment under Allies’ Centrifugalism, Inflationary Pressure and Election Risk
Why hasn’t China called me yet? Does he not have me in his heart? Did he leave with another woman? Did I say that sentence wrongly? Is he impatient? Is he tired of me? Does he not love me anymore? Why hasn’t he called me yet? — Donald Trump, Waiting for Your Baby Trump, who never waited for a call from China, could only unilaterally give in on April 11 and exempt some Chinese goods from additional tariffs. Trump, who believes in the Japanese barbaric winning theory, has always claimed that he has won and won again. What forced him to give in? It’s not that he wants to give in, but that reality forces him to give in.
- EU and Canada: The Collapse of the Alliance System The EU’s countermeasures against the US steel and aluminum tariffs are divided into two phases: the first phase will impose tariffs on 8 billion euros of US goods from April 1, and the second phase will impose sanctions on 18 billion euros of goods, covering politically sensitive areas such as beef and whiskey. Canada imposed a 25% tariff on $29.8 billion worth of U.S. goods and removed U.S. alcoholic beverages from its shelves, directly hitting Trump’s agricultural base. This tariff confrontation between allies has caused U.S. companies to lose traditional markets. For example, Tesla’s new car registrations in Germany plummeted 76% year-on-year. Without these iron votes, the Republican Party may lose to the Democratic Party in next year’s midterm elections. At that time, he can only be a lame president and can no longer make money in the U.S. stock market like he does now.
- The backlash effect of the U.S. economy Trump’s tariff policy not only failed to achieve his economic goals, but also caused a significant backlash on the U.S. economy. American consumers have become the most direct victims. After the increase in tariffs, the price of Chinese goods has risen, resulting in a significant increase in the cost of living for families. The Yale Budget Lab estimates that each family loses an average of $3,800 per year. American companies are also deeply affected. Many manufacturing companies rely on raw materials and parts imported from China, and the increase in tariffs directly raises production costs and compresses profit margins. Some companies even face operating difficulties or bankruptcy risks. In particular, small and medium-sized enterprises, due to limited funds and resources, bear the brunt of trade frictions. In addition, the uncertainty of tariff policies has also had an impact on financial markets. Investor confidence has declined, the US stock market has experienced sharp fluctuations many times, and the S&P 500 index has experienced multiple rounds of declines during the trade war. This turbulence has not only affected the US economic recovery, but also made global investors worried about the US economic outlook. In April 2025, the Sino-US tariff war quickly heated up in the form of a “four-jump”, however, this series of tariff measures failed to effectively reduce the US trade deficit. In 2024, the US trade deficit with China was still as high as 361 billion US dollars, an increase of 12% from 2018. The Trump administration tried to protect the US manufacturing industry through tariffs, but this “shoot first and aim later” approach ignored the complexity of the global economy and the irreversibility of the supply chain. Zhang Monan, deputy director of the US-Europe Research Department of the China Center for International Economic Exchanges, pointed out that Trump’s tariff policy will backfire on the United States itself and significantly increase inflation. Specifically, among the targets of the high tariffs imposed by the United States, there are a large number of countries with trade surpluses with the United States, which account for the vast majority of the United States’ overall foreign trade deficit. Therefore, imposing high tariffs on these countries will affect the prices of imported goods, and most of these increased costs will eventually be borne by American consumers. On the other hand, the tariff policy will raise the production costs of the US manufacturing industry and related industries. As an important link in the global industrial chain, if the United States imposes high tariffs on other countries, it will also lead to price increases for some raw materials imported by the United States, thereby indirectly affecting the manufacturing costs of the United States.
- Trump was hit by his own “boomerang” The wide range and strong intensity of Trump’s taxation this time made Federal Reserve Chairman Powell exclaim: “Far beyond expectations!” At present, economies of many countries and regions, including the European Union and Canada, have expressed their intention to take countermeasures, and many countries have also expressed their consideration of negotiating with the United States. Zhang Monan analyzed that “this intensity now may trigger trade conflicts on a global scale, which will backfire on the US economy itself and may also aggravate the US economic recession.” According to the US government, they intend to reduce the trade deficit and promote “manufacturing reflux” by increasing tariffs. However, Zhang Monan pointed out that the imposition of tariffs will not only fail to solve the problem of US trade imbalance, but may also further aggravate the decline of the US manufacturing industry. Specifically, the US trade imbalance is mainly caused by the long-term “eating the grain of the next year in the current year” and the hollowing out of the industry, which is closely related to over-reliance on finance. From the perspective of the United States itself, if the hegemony of the US dollar is not resolved, the large-scale export of the US dollar under the capital account will inevitably lead to a deficit under the current account. Such a debt-dependent structural problem is difficult for the United States to solve. On the other hand, the tariff policy will lead to the disorder of the global production and supply chain. If American companies need to re-arrange the production and supply chain, it will greatly increase the operating costs and time costs of American companies around the world, thereby affecting the production efficiency and market competitiveness of enterprises.
- The political consequences are related to Trump’s personal interests Trump’s tariff policy has not only triggered a chain reaction at the economic level, but also had a far-reaching impact at the political level. At the end of 2026, the United States will usher in the mid-term elections, which will also be the first “big test” for Trump. Trump’s tariff policy has caused divisions within the Republican Party. Republican Senator Cruz, who is usually regarded as Trump’s ally, recently issued a stern warning: If Trump’s tariff policy eventually drags the US economy into recession, the Republican Party may face a “bloodbath” in the 2026 midterm elections. Zhang Monan believes that whether it is domestic or foreign affairs, tariff policies will have an impact on the Republican Party’s election situation in the midterm elections. First of all, the US government used the International Emergency Economic Powers Act to impose tariffs this time, which actually bypassed the US Congress. Both the House and Senate of the US Congress opposed the imposition of high tariffs, and the US political arena has begun to rebound. On the other hand, the substantial increase in high tariffs will inevitably push up the domestic inflation level in the United States and increase the cost of living for the people. These ordinary people, especially voters in the “Rust Belt”, are Trump’s important base. This will seriously weaken the Republican Party’s trust in the American people and trigger a backlash in public opinion. In the end, Trump will “self-destruct the Great Wall” Former US Treasury Secretary Yellen pointed out that Trump’s tariff policy is the “worst self-mutilation” in US history, causing a “huge protectionist shock” to the US and global economy. Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, also warned that Trump’s tariff policy has caused investors to “trauma, shock or fear” and seriously damaged the reputation of the United States. This policy has not only failed to enhance the economic competitiveness of the United States, but has weakened its position in the global economy. In the end, Trump’s tariff war will only become a farce of “self-destruction”, which not only damages the economic interests of the United States itself, but also brings more risks to Trump himself. #scandal
