US president Trump has made tariffs a weapon which risks disrupting global supply chains, reigniting inflation, alienating allies, and punishing American consumers, writes Robert P Antoshak, VP of Global Strategic Sourcing at Grey Matter Concepts.

Tariffs have long been part of the American economic playbook — deployed as tools of economic statecraft, often under the banner of protecting domestic industries or addressing trade imbalances. But US President Trump has rebranded them as a political tool. With last week’s announcement of sweeping “reciprocal tariffs,” Trump doubled down on his signature style of economic populism: retaliatory, transactional, and theatrical.

This isn’t just a rerun of Trump’s first-term trade wars — it’s a sequel with higher stakes, deeper polarisation, and more fragile geopolitical alliances. And while the word “reciprocal” might sound fair, the policy behind it is anything but that. Beneath the rhetoric lies a strategy that risks disrupting global supply chains, reigniting inflation, alienating allies, and punishing US consumers.

The allure of reciprocity

Trump’s message is clear and emotionally resonant: if a country imposes a tariff on US goods, the US should hit back with the exact same rate. It’s trade as mirror warfare — simple, satisfying, and seductive to voters who feel the US has been played for a fool on the global stage. At his White House press conference, Trump put it bluntly: “If China taxes our cars at 25%, we’ll do the same. No more one-sided deals.”

To many Americans, especially those frustrated with offshoring, factory closures, and the decline of domestic manufacturing, the idea carries intuitive appeal. The notion of symmetry in trade — tit-for-tat fairness — feels like a long-overdue correction to decades of perceived exploitation by foreign nations.

But international trade isn’t built on emotional symmetry. Tariff rates differ not only because of unfair practices but due to multilateral negotiations, development considerations, and sector-specific strategies. Trying to flatten these differences with a one-size-fits-all formula disregards decades of diplomacy and existing obligations under the World Trade Organization, an organization originally established by the United States and others.

The Trump tariff formula problem

To calculate reciprocal tariffs, Trump announced that after an across-the-board, across-the-world base tariff of 10%, countries would face reciprocal tariffs based on a formula devised by the White House.

At his press conference last week, Trump cited a report by the US Trade Representative’s Office measuring foreign trade barriers as the basis for reciprocal tariffs. But nothing could be further from the truth.

Instead, the Trump team devised an arbitrary, nonsensical formula to calculate reciprocal tariffs. The formula takes US Imports from the Foreign Country in 2024, divides that by the 2024 US Trade Deficit, and then halves that value to calculate a reciprocal tariff rate. As an example, the calculation for China looks like this:

All countries are subject to the same calculation. It’s absurd to impose tariffs without considering a country’s trading status, level of economic development, or the actual trade impact on the US economy. Small nations were especially hard hit by this calculation. Furthermore, these tariffs are in addition to the existing 10% across-the-board tariffs. For many countries, this results in multiple tariffs with combined rates exceeding 50%.

The question is, why? Well, it appears to be Trump’s way of inviting countries to Washington to enter bilateral trade negotiations. Some may take the initiative and request consultations, but others won’t. Take China: they just announced a 34% tariff on all US exports to China. The EU may follow suit. But others, perhaps in South Asia, may try a more conciliatory route. India, for instance, has said it will not impose retaliatory tariffs on the US.

The real goal: Leverage, not fairness

Despite the chaos these policies may provoke, Trump’s defenders argue that reciprocal tariffs are not about punishment but leverage. By raising the cost of doing business with the US, they hope to force trading partners to the negotiating table to fix long-standing trade imbalances. “This isn’t about vengeance,” one White House insider said. “It’s about resetting the terms of global trade in America’s favour.”

In theory, creating friction in the system could force recalibration. But in practice, these kinds of brute-force tactics have often backfired — hurting US producers and workers while failing to deliver substantive reforms.

Economic fallout: What’s at stake

The economic risks of this policy are profound. The US economy is structured around consumption, not export-led manufacturing, a sector that moved offshore 30 years ago. The United States imports everything from finished goods to intermediate components, and tariffs would act as a tax on virtually every rung of the supply chain.

Many US companies rely on globally sourced parts and materials. Reciprocal tariffs on countries like China, Mexico, and Germany would raise input costs, erode competitiveness, and shrink profit margins — especially for small- and medium-sized manufacturers. Indeed, at a time when inflation is still fresh in voters’ minds, tariffs would push prices higher on everything from groceries to electronics. It’s a regressive tax that hits working families hardest, and it would likely trigger a new round of Fed intervention — raising interest rates when many hoped for cuts.

Tariff wars are never one-sided. The EU has already warned of a “proportionate” response. China has already hit back. Even allies like Canada and South Korea retaliated during Trump’s first term, strategically selecting US exports from politically sensitive swing states. Moody’s Analytics estimated that Trump’s original tariff push cost the US economy 300,000 jobs. This new round could be worse, especially if it triggers a broader trade war. When businesses can’t predict costs, they delay hiring, freeze investments, and lay off workers.

Stock markets dive, allies bristle

Markets loathe uncertainty, and the announcement immediately rattled investors. As of this writing, the Dow Jones has plunged on the news, while key indices in Europe and Asia posted steep declines on fears of a reignited trade war. Industry groups representing automakers, retailers, and tech companies voiced alarm, warning that the policy would disrupt planning and drive-up consumer prices. As usual, the fashion industry is caught up in the middle panicked to find a solution.

Federal Reserve chairman Jerome Powell said: “While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent. While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected, and the economic fallout of higher prices and slower growth is also likely to be larger than expected.”

Make no mistake, foreign governments are treating Trump’s announcement as a provocation. Yet, what’s especially dangerous is the potential erosion of Western unity. At a time when the US needs allies to confront geopolitical challenges —Russia in Ukraine, China in the South China Sea —Trump’s unilateralism could drive wedges into fragile coalitions.

One EU diplomat warned: “We supported America on sanctions against Russia. We backed the Indo-Pacific strategy. But if we’re treated like adversaries on trade, we’ll recalibrate our posture.”

Reciprocal tariffs as political theatre and a double-edged sword

Trump’s reciprocal tariff strategy reflects a broader pattern in his economic policy: branding over substance. Like “America First” or “Build the Wall,” the appeal lies in its simplicity, not its efficacy. But slogans don’t make trade deals. International trade is governed by norms, institutions, and interdependence. Trying to reshape that system with a bumper-sticker ideology risks doing more harm than good.

Moreover, the US already has tools to challenge unfair practices: Section 301 investigations, anti-dumping and countervailing duties, and WTO dispute mechanisms. These tools are deliberate and often successful. Trump’s proposal sidesteps them entirely — replacing due process with gut instinct.

The tariff proposal plays well with Trump’s base from a messaging standpoint. It channels economic nationalism, grievance politics, and a narrative of US victimhood. It also signals to his base that he is actively doing big, aggressive things. But it’s an illusion of strength and will leave Trump open to counterattacks.

Reciprocal tariffs sound tough. They fit neatly into speeches and stump lines. But they are economically flawed, diplomatically damaging, and politically risky. They ignore the realities of global commerce and punish Americans more than foreign competitors. They undermine the rules-based system the US helped build and benefit from.

In the end, Trump’s plan may not restore American greatness — it may weaken it. By turning trade into a zero-sum game, he risks isolating the US, raising costs, and reigniting economic uncertainty.

Strong leadership means engaging the world with strategy, not just slogans. And if reciprocal tariffs become the cornerstone of US trade policy again, it won’t just be America’s trading partners who suffer. It’ll be Americans at the checkout line, on factory floors, and in the voting booth — paying the price.

A last point to consider: Trump has intimidated media companies and law firms into paying hefty fines as a form of acquiescence to him. Is this settling grievances or currying favour with the king? A horrifying prospect is that Trump’s tariff act has a hidden dark side that forces US companies to capitulate to his policies (or wishes) in exchange for reduced tariffs. It sounds like a mafia shakedown, but Trump has always enjoyed the patronage of others. Who knows, he may have countries, companies, markets, and average Americans fawning over him all at the same time.

I hope this is just hyperbole floated by some Democrats and left-leaning populists. Drama has Trumped the world these days. Or so it seems.

By Just Style