Trump’s tariffs: Is motormouth US President pushing world economy towards de-globalisation? Explained with five examples

Trump’s tariffs: Calling April 2, 2025, as ‘Liberation Day‘ for the American trade policy, US President Donald Trump imposed a 26% reciprocal tariff on imports from India, Japan, and other countries. As expected, this ‘America First’ policy led to a massive backlash worldwide, even in the US. According to experts, this protectionist policy adopted by the White House after the inauguration of Donald Trump as the 47th US President may push bilateral trade agreements among the 180 countries affected by Trump’s tariffs. They said that the US President’s motormouth approach may lead to a significant shift in global trade, which may fuel an aggressive global trade war. They also predicted that Donald Trump’s arrogance may turn the WTO into a redundant institution.

Taking a dig at Donald Trump’s tariffs, Lawrence H. Summers, Charles W. Eliot University Professor and President Emeritus at Harvard shared his views from his ‘X’ channel account, “Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet.”

Former Secretary of the Treasury for President Clinton and former Director of NEC for President Obama added, “The best estimate of the loss from tariff policy is now closer to $30 trillion or $300,000 per family of four.”

Trump’s tariffs: A threat to world economy?

Highlighting the threat to the world economy due to Trump’s tariffs, Sonam Srivastava, Founder of Wright Research PMS, said, “The announcement of reciprocal tariffs by the US is a significant development that marks the beginning of what could be a broader and more aggressive phase of global trade disruption—a Trade War 2.0. Tariffs across multiple geographies mean higher input costs globally, which could push US inflation higher and complicate the Fed’s rate cut trajectory—something the markets had been relying on.”

Pointing towards the potential shift in the global trade pattern, Kush Gupta, Director at SKG Investment & Advisory, said, “This America First Trade policy could mark the biggest shift in global trade since World War 2. Fitch Ratings have already downgraded global growth forecasts from 2.6% to 2.3%, with US growth projected to slow down to 1.5%.”

De-globalisation fear

Sonam Srivastava highlighted the fear of de-globalization for the world economy: “From a medium to long-term perspective, Trump’s tariffs move may push countries toward de-globalization and bilateral trade pacts.” However, she said that de-globalization and bilateral trade pacts would create opportunities for India to emerge as a neutral, stable, and strategic partner.

Echoing with Sonam Srivastava’s views, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “The process of de-globalization is already underway, and this can be understood with the following five examples: initiation of de-dollarisation under the leadership of Russia, crude oil trade in local currencies and gold, divergent stock markets, rising bi-lateral trade pacts with European and middle east countries, and divergent central banks’ from the US Federal Reserve.”

The Lakshmishree Investment and Securities expert said that Trump’s tariffs would fuel bilateral trade agreements among WTO member countries and WTO’s role in global merchandise.

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