President Donald Trump’s approach to trade has raised concerns about the stability of the global economy. His strategy of imposing tariffs appears to be an attempt to assert dominance, but it seems to be backfiring.
One of Trump’s goals with these trade wars was to encourage American production and create more local jobs, potentially reducing the number of migrants, whom he claimed were taking jobs that should go to Americans. However, with many migrants gone, there are numerous job vacancies that American workers are not filling.
The situation remains dynamic, making it impossible to predict the outcome with absolute certainty. However, a few observations can be made at this moment. At the start of his presidency, Trump may have considered himself a modern-day Alexander the Great or Emperor Caesar, expecting everyone to bow to his authority. Fortunately for the world, Mexico and Canada—America’s neighboring countries—have stood their ground, prompting Trump to take a temporary step back.
Mexico initiated a counter-offensive and decided to challenge him. Currently, there is a 30-day truce in place to address their differences. While the primary focus might be on immigration and drug flow from Mexico and Canada, it’s important to note that Mexico is also concerned about the flow of guns from the U.S. This situation could either benefit or undermine both countries.
Trump’s trade war extends beyond North America, with China appearing to be the primary target. The U.S. has imposed tariffs on Chinese goods, prompting retaliatory measures from Beijing. Trump’s use of tariffs as a containment strategy raises significant concerns in international diplomacy. He has threatened BRICS countries that if they proceed with plans to introduce a BRICS currency competing with the U.S. dollar, he would impose a 100% tariff on them.
South Africa is reportedly considering its tariff regime as a buffer against U.S. foreign policy. These tensions raise fundamental questions about the nature of international relations. Trump seems unwilling to engage diplomatically, opting instead to coerce countries into compliance with U.S. interests.
This situation highlights the need to analyse tariffs within the broader context of emerging global geopolitics, particularly regarding the U.S. strategy to contain China. This dynamic is becoming increasingly evident, even in Africa, where there is a significant power struggle involving the U.S. and other global players.
The unfolding situation should alert policymakers and international relations experts in Africa, particularly, Nigeria. They should recognise that no foreign power will come to Africa’s aid if it solely looks east for support. Countries like China, with which Africa seems to be cavorting, primarily focus on their interests. The Trump trade policies thus call for a deeper reflection from countries struggling with domestic economies.
On the global stage, economic experts fear that Trump’s strategy could significantly impact corporate earnings and increase market instability. However, the U.S. and its citizens might not escape unscathed either; they could face the greatest challenges may not be immune to the repercussions. It could affect a substantial portion of U.S. trade, potentially reversing decades of international tariff reductions. American citizens may experience hardships as prices for goods are likely to rise in the domestic market. A coalition of trade partners is already emerging in response, with the U.S. as the common adversary.
The global landscape has not turned out as Trump envisioned. Many around the world agree that the trade war is an unwinnable endeavour. History has shown that collective efforts often triumph over individual arrogance, as demonstrated in the First and Second World Wars, where collective action defeated individual hubris.
Another important factor to consider is collateral damage. While it may seem that tariffs only hurt the other side, it’s crucial to recognise that an economy cannot thrive in isolation. Tariffs affect not only the targeted countries but also the local economy. Because economies are interconnected, tariffs can disrupt supply chains and raise costs for domestic consumers. Tariffs on imported components can complicate the ability of American manufacturers to produce goods domestically. For instance, while many believe that cars are solely manufactured in the U.S., many components are sourced from abroad. If tariffs are imposed and manufacturers seek alternatives, the U.S. may struggle to produce these goods domestically.
Also, consider the Mexican influence on grocery prices. The cost of groceries, particularly avocados, is rising in the U.S. because many restaurants depend on avocados sourced from Mexico. This price increase, among others, may have prompted Trump to convene discussions at the Round Table to resolve these issues within the 30-day timeframe.
Overall, education plays a key role in this context. Trump believes he has the solutions, but the complexities of global trade require a more nuanced understanding. Much of the support Trump assumes he has from the local population is based on significant misinformation or phenomenal ignorance. He seems to believe that by imposing tariffs, other countries will comply. What many people do not realise is that while international trade continues, it is U.S. importers who ultimately absorb the cost of these tariffs, resulting in higher prices for consumers in the country. Despite this reality, many Americans remain unaware or choose to ignore the implications.
They overlook the fact that they will bear the financial burden of these tariffs. This explains why the government is warning citizens about a potential period of hardships, despite Trump’s campaign promises to eliminate such difficulties. The drastic shift in messaging highlights the stark contrast between campaign promises and current realities. If individuals make decisions that ultimately harm themselves out of spite, they will find themselves at a disadvantage.
During the election, many U.S. citizens did not recognise how their actions would affect them. Trump’s presidency may eventually come to an end, and unless something significant occurs, he has already served two terms. At this point, he may feel emboldened to disregard public opinion and pursue his agenda. While there is a system of checks and balances within the U.S. government, many sectors are often influenced by various political parties. Currently, Trump’s Republican Party controls the executive and judicial branches and wields considerable influence in Congress, with all his appointees in place.
However, midterm elections are scheduled to occur in two years. If current policies lead voters to realise they made a mistake, there could be a shift in dynamics during those elections, potentially leaving Trump in a position akin to that of a lame-duck president. Voters tend to cycle through periods of ignorance, failing to recognise the costs of their decisions until it is too late. This contrasts sharply with situations where people assess candidates based on their actions and make informed choices, thus preventing the concentration of power in the hands of a few. Many citizens feel apprehensive as a result.
To some, Trump’s trade war might bring about far-reaching consequences for the global economy, particularly threatening the economies of weaker countries. However, others are optimistic that it could spark an economic renaissance in regions that thrived during favourable trade conditions. Africa may thus need to proactively confront this situation from a positive perspective. The second part of this editorial will explore ways Nigeria and the African continent can leverage this trade war to their advantage.
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