Trump's tariffs: Trump's Response Tax Strategy

 Trump's tariffs: Trump's Response Tax Strategy

In the 21st century, commerce has increasingly been controlling politics. President Trump has made this clear through his business experience. His strategic approach to reviving America's economic, political, and trade power is likely to yield significant results.

President Donald Trump's new import policy has attracted global attention. This policy became effective from April 2, and in his "Freedom Day" declaration, President Trump clearly outlined his approach. The long-term effects of this policy will not only affect America or the involved countries but will have a global impact. The “tariff-15” or the fifteen rogue countries referred to by President Trump include nations like India, China, Mexico, Canada, the European Union, Ireland, Germany, Taiwan, Japan, South Korea, Thailand, Italy, Switzerland, and Malaysia. In his second term, Trump has adopted a policy of aggressive trade strategies to improve the economic situation of his own country. Washington's justification is that for years, these countries have levied higher taxes on American products and earned significant profits. As a result, the bilateral trade between these countries and the U.S. (in terms of value) has been imbalanced. This has been financially detrimental to the U.S. middle class. Therefore, President Trump's economic pressure on these countries has caused a shift in the dynamics.

Taking India as an example, in 2024, the total bilateral trade volume (in dollar terms) between the two nations was $129.2 billion, with a trade deficit of $45.7 billion. Last year, India exported $87.4 billion worth of goods to the U.S., while importing $41.8 billion worth of American products. Due to higher tariffs on American goods in India (such as 100% external duties on agricultural products), the demand for these products has decreased. Not only India but also the other countries mentioned above have had similar trade imbalances, leading to a situation where America has incurred losses of billions of dollars. Thus, President Trump's retaliatory tax strategy aims to level the playing field for all involved.

India, in particular, has a much greater trade imbalance with other nations. For example, with China, the imbalance stands at $295.4 billion, with Vietnam at $123.5 billion, and with the European Union at over $100 billion. Trump’s retaliatory tax system is designed to rectify these imbalances, but it is likely to financially burden American consumers and businesses. 

However, Trump's formula seems to be just a form of pressure. Many countries have already reduced the tariffs on American goods. India has announced a $23 billion tariff reduction after talks with the U.S. Likewise, countries like Vietnam, South Korea, and Japan have adopted similar approaches. President Trump and his trade secretary Scott Bezaunt are keeping the doors open for further discussions until the last moment. This signals that while the tariff strategy will be effective from April 2, ongoing negotiations for mutual agreement will always be open.

In the 21st century, commerce is firmly controlling politics. President Trump’s business expertise has made this evident. His strategic move aims to make America a global superpower once again in terms of economic, political, and trade influence.