Trump's Tariffs: The World Trade Enters a New Era, the Global Economy Heads Toward Regionalization

On the last day of July, US President Trump once again waved the tariff baton, signing a new tariff implementation order, announcing that starting from August 7, goods exported to the United States from dozens of countries would be subject to so-called "reciprocal tariffs" ranging from 10% to 50%. With this, France's Le Monde published a large headline on the front page of its print edition on Friday, stating that international trade has entered an era of "survival of the fittest." The new tariffs imposed by the United States seem to have pressed the fast-forward button on the global trade map, suddenly reverting it back to the 1930s. The tariff numbers announced by the United States against dozens of countries seem to be building new tariff walls on the world map.

Le Monde stated that after Trump reached a 15% tax rate agreement with the EU, Europeans held back and did not retaliate. Some Eastern European countries, fearing the loss of American security protection, chose to bow their heads, resulting in division within the EU at the negotiation table. Europe lacks the "geopolitical muscle" of the United States, and can only reluctantly nod as students. French President Macron even helplessly said, "To have freedom, you must make others fear. Unfortunately, we are not scary enough."

Trump clearly tasted the benefits, and now he is preparing to promote his protectionist recipe globally. Before Trump took office, the average tariff level in the United States was 2.5%, but now, according to the new tariff rates signed by Trump, the average tariff level in the United States has risen sharply to about 17%, setting a new high since the 1930s.

"Non-Discrimination Principle"

Le Monde pointed out that the new tariffs announced by the United States are not applied equally. Canada and Mexico were exempted due to their "North American factory" status, while China was heavily hit because it is the main enemy. However, China appears confident, holding the "rare earth card" in Beijing. Other countries accepted Trump's uniform protectionist measures. This operation directly tore apart the WTO's "non-discrimination principle." This sacred cornerstone that supported four decades of global prosperity - the "non-discrimination principle" - is now as fragile as a cracker under Trump's hands.

Le Monde pointed out that in the new world trade map, multinational giants can use global factories to allocate production capacity, thus maneuvering easily through the tariff maze.

Le Monde also stated that America's protectionism will continue. Taking an isolationist approach and competing with China have become a consensus between the two major parties in the United States.

However, America's isolationism will also bring many questions without answers yet. For example: How will other countries in the world reduce their dependence on the United States? If the United States withdraws from the global economy, can the dollar still continue to serve as an international currency? Since the beginning of 2025, the dollar has depreciated by 10%, but no other currency has been able to take over the role of a safe-haven currency.

Economic Regionalization

If Trump's tariff strategy continues, the United States may receive applause for "domestic manufacturing" in the short term, but in the long run, it may pay the price of rising prices and losing allies.

Other countries around the world will not sit idly by. China will strengthen South-South cooperation with emerging economies, building a trade network independent of the dollar, turning the "de-dollarization" from a slogan at meetings into reality in shopping carts. India quietly resumed trade negotiations with New Zealand and the EU, and the 12 members of the Trans-Pacific Free Trade Agreement are actively contacting Southeast Asia and Europe.

Rather than saying globalization is dead, it is more accurate to say it is transforming: the global economy will move toward economic regionalization, agreements between countries with consistent policies will be strengthened, and the distance between markets and production sites will also be closer. The future world trade map is likely to look more like a colorful patchwork quilt.

As for ordinary consumers? They will probably complain about prices while missing the old era called "globalization."

Original article: https://www.toutiao.com/article/1839301973772300/

Statement: This article represents the views of the author.