If the United States can adapt flexibly and prioritize consensus with its trading partners, it may solidify its economic dominance. Otherwise, persistent high tariffs risk deepening global trade fragmentation and will challenge America’s long-term influence.
In the spring of this year, the reelection of U.S. President Donald Trump sparked a bold and contentious trade offensive. The so-called Liberation Day tariff hikes were announced on April 2 but were followed by a 90-day pause for most countries. That pause ended on July 9, and the policy’s mixed results laid bare a delicate balance of strategic wins and unexpected pitfalls.
Trump’s tariff plan unfolded as a meticulously crafted stress test, probing both the tolerance of global trade partners for high tariffs and the White House’s ability to coordinate its policy internally. This strategy not only underscored Trump’s ambition to reshape global trade but also exposed the intricate challenges of navigating international and domestic dynamics.
Gauging global tolerance
Trump imposed a flat 10 percent tariff on all imports, with additional levies on a country-by-country basis. Initially viewed within the administration as a risky move that could ignite a global trade war, the policy’s rollout revealed a more complex reality. While the 10 percent universal tariff met resistance, it proved manageable for many nations, particularly smaller economies dependent on U.S. markets.
Between April 2 and the suspension’s end on July 9, Trump tested the waters with higher, tailored tariffs, probing trade partners’ limits and setting the stage for future negotiations. The tariff policy doubled as a stress test for Trump’s control of his administration. Inside the White House, factions sparred. Moderates urged restraint, warning that a full-scale trade war would hurt the U.S. economy. They saw the 10 percent tariff as sufficient leverage but cautioned that steeper rates— such as teh 50 percent handed to Brazil or up to 36 percent for developing nations — could provoke retaliation, raising costs for American consumers and businesses. They advocated bilateral deals, prioritizing allies like the European Union and United Kingdom to minimize supply chain disruptions.
Hard-liners pushed aggressive protectionism, viewing high tariffs as a blunt tool to force concessions and shield U.S. manufacturing. They called for simultaneous tariffs to close loopholes such as transshipment and “ origin laundering,” while linking tariffs to non-economic issues.
Moderates feared inflation and supply chain chaos; hard-liners blamed slow progress on overly conciliatory deals with allies. The rapid rollout of the April 2 tariffs and the coordinated suspension period showed Trump’s ability to quell internal dissent. By July 9, a unified wave of tariff letters underscored his team’s alignment under pressure.
During the 90-day suspension, the U.S. secured deals with the UK and Vietnam — modest but strategic wins that serve as models for future agreements. The U.S.-UK agreement, a framework in which details are still pending, saw the UK commit to lowering barriers on U.S. agricultural and industrial goods. Export tariffs from the UK to the U.S. are expected to be reduced in exchange for greater U.S. market access for British cars and financial services.
According to U.S. media reports, the U.S.-Vietnam agreement capped Vietnam’s export tariffs at 20 percent (down from a threatened 46 percent) and included pledges to curb transshipment, indirectly targeting so called Chinese transshipped goods. It also eased U.S. tech and agricultural exports to Vietnam and secured Vietnam’s commitment to avoid BRICS-led de-dollarization efforts, thereby aligning with Trump’s aim to reshape supply chains and counter China’s influence.
Exposed weaknesses
Trump’s “Liberation Day” tariff plan, followed by a 90-day suspension period, was a crucible for global trade, as it aimed at reshaping the international economic order while testing America’s policy resilience and internal cohesion. This audacious strategy showcased U.S. dominance in global commerce but also laid bare the intricate challenges of its execution. From the reactions of the international community to the internal dynamics within the White House and initial trade agreements, this policy experiment offered early insights into Trump’s trade ambitions while exposing its inherent limitations.
Complex legal, political and economic hurdles (trade talks often take 18 months) exposed a gap between Trump’s ambition and reality. Japan stalled over its auto and electronics exports, with Prime Minister Shigeru Ishiba calling the threatened 25 percent tariff “deeply regrettable.” The EU made preliminary progress but secured no tariff relief. Allies such as Mexico, Canada, South Korea and Australia saw minimal headway, citing domestic pressures and frustration with U.S. unilateralism. Trump’s July 11 threat of 35 percent tariffs on Canada prompted a sharp rebuke from new Canadian Prime Minister Mark Carney, who warned of targeted retaliation and vowed to uphold the USMCA’s cooperative spirit.
The Trump administration vowed in April that it would strike trade deals with 90 countries within 90 days. By July 9, only the UK and Vietnam agreements had materialized — significant but lightweight in economic terms. According to U.S. Census Bureau data, U.S.-UK trade in 2024 totaled $148 billion (2.8 percent of U.S. trade), with a $11.9 billion U.S. surplus. U.S.-Vietnam trade reached $132 billion (2.5 percent of U.S. trade), with a $117.7 billion U.S. deficit. These pale next to the giants — China ($688.3 billion in 2024) and the EU ($800 billion).
This shortfall undermined Trump’s credibility, fueled market uncertainty and amplified fears of looming inflation as talks with China and the EU stagnated.
Tariffs as political leverage
On July 9, Trump announced a 50 percent tariff on Brazil to take effect on Aug. 1. He explicitly linked it to Brazil’s “political persecution” of former president Jair Bolsonaro, a Trump ally who faced charges for allegedly plotting a coup and targeting President Luiz Inacio Lula da Silva. This move exposed the political motives behind Trump’s tariffs, contradicting claims of purely economic aims.
Lula denounced the tariffs as baseless, noting that the U.S. had enjoyed a $410 billion trade surplus with Brazil in the past 15 years. He called the policy an offensive intrusion on Brazil’s judiciary and vowed retaliation targeting U.S. planes (Boeing), medical devices and IP concessions. Axios reported that Trump was wielding U.S. economic might to meddle in another nation’s politics, while The Guardian warned that the tariffs could backfire, boosting Lula’s 2026 re-election prospects. This politicization risks straining U.S. diplomacy and eroding its soft power.
Defying WTO principles
Trump’s tariffs flout the World Trade Organization’s “special and differential treatment” principle. His July 9 tariff letters revealed stark disparities: Myanmar and Laos face a 40 percent tariff; Cambodia and Thailand face 36 percent, with Bangladesh at 35 percent and Indonesia at 32 percent — all of which are low-income countries.
According to the International Monetary Fund’s latest World Economic Outlook (April 2025), per capita GDP is Cambodia $2,870, Thailand $7,770, Bangladesh $2,690, Indonesia $5,030, Myanmar $1,180 and Laos $2,100. In contrast, wealthier nations such as South Korea ($34,600) and Japan ($34,000) face only a 25 percent tariff. This structure imposes a disproportionate burden on fragile economies, undermining global trade fairness.
EU Trade Commissioner Maros Sefcovic warned in July that this approach “undermines fair trade” and could sput developing nations to file WTO complaints. For instance, Cambodia’s $9 billion in exports to the U.S. (40 percent of the total) face heavy losses at 36 percent, as low-margin clothing and footwear struggle. The IMF projects a 5 to 10 percent export revenue drop for developing nations, hitting jobs and growth, with limited fiscal capacity for countermeasures. High tariffs will inevitably push these countries toward China or the EU, as they continue to advocate for special and differential trade conditions for developing nations. The United States is weakening its own appeal and influence in the Global South.
Discriminatory deals
Trump’s tariffs and trade agreements, such as the U.S.-Vietnam deal, explicitly target third parties, particularly China. Vietnam’s agreement capped direct export tariffs at 20 percent but doubled tariffs on transshipped goods to 40 percent, aiming at Chinese products funneled through Vietnam (15 percent of its $140 billion in U.S. exports last year). The U.S. Trade Representative’s Office vowed stricter origin checks to curb China’s Southeast Asia supply chain dominance. Vietnam’s concessions, including pledges against de-dollarization, risk straining its ties with China.
Trump also targeted BRICS nations, whose $660 billion in U.S. exports last year (around 17 percent of U.S. imports) face an extra 10 percent tariff for pushing de-dollarization. The 50 percent Brazil tariff, in addition its Bolsonaro link, signals frustration with Lula’s BRICS alignment. While this might sow discord within BRICS, it risks galvanizing counteractions, such as stronger New Development Bank ties or regional trade pacts, challenging U.S. economic leverage.
Conclusion
Trump’s Liberation Day tariffs and 90-day suspension period stand as both a bold bid to redefine global trade and a contentious high-stakes gamble. By testing the tolerance of international partners, consolidating White House unity and securing trade deals with the UK and Vietnam as strategic templates, the policy achieved short-term breakthroughs. Yet, the sluggish pace of agreements, diplomatic tensions fueled by political motives, differential tariff designs flouting WTO principles and discriminatory clauses targeting third parties exposed significant flaws. These undermine credibility and heighten market uncertainty.
Looking ahead, the success of Trump’s tariff strategy in navigating the complex global trade landscape hinges on securing breakthroughs with major partners while balancing domestic inflationary pressures and geopolitical risks. If the U.S. can adapt flexibly and prioritize consensus with its trading partners, it may solidify its economic dominance. Otherwise, persistent high tariffs risk deepening global trade fragmentation, which will challenge America’s long-term influence.
