Trump's customs policy: a day of liberation” or economic ruin?

Trump's customs policy: a day of liberation” or economic ruin?

USA - On April 2, 2025, US President Donald Trump proclaimed the day as a "day of liberation" and thus triggered a wave of criticism in the United States. Trump considers the United States trade deficits towards countries such as Germany and China as a national disgrace and plans to end these deficits with a strict customs policy. This step could have serious consequences for the global trade order, which was shaped by the USA for a long time. Critics fear that the new customs policy endangers the existing order that has promoted prosperity in many countries. Oekonews reports that the share prices in the USA have dropped on the first day of the new tariffs and protesting leading US scientists.

Trump has announced that it is 10 % of 10 % as standard, 20 % for European goods, over 30 % for China and almost 50 % for Vietnam. He describes these measures as a retaliation for the treatment of the United States by other countries. Economists, including David Ricardo, argue that free trade maximizes the prosperity of all countries. The theory of the comparative cost advantages suggests that countries should specialize in the production of goods that you can make cheapest. Higher tariffs could harm global trade and in particular the US economy that depends heavily on imports.

economic effects of customs policy

The prices in the USA could increase due to the increased tariffs, which would lead to inflation. Above all, socially weak Americans would be affected by the rising prices. In addition, China has already announced against tariffs of 34 % on US products, which further fueled the trade conflicts. Trump has the goal of persuading foreign companies to relocate jobs to the United States, but many industries could not benefit from such a measure.

The registration of tariffs is a means of trade policy, but its expansion in this form could lead to a global economic crisis, including increasing unemployment figures and falling corporate profits. The United States has to face reality that a declining free trade also affects jobs in the country, as was the case in the past. According to experts, tariffs are closely associated with the trend towards globalization and the breakdown of trade barriers that began after the Second World War.

Protectionism and its consequences

The return to high tariffs is not new; Jürgen Matthes from the German Economy Institute calls development a repeated trend towards protectionism since the 2008/2009 financial crisis. Historically, tariffs helped many countries, including the United States and Germany, during their industrialization. But in the current global trade landscape organized by the World Trade Organization (WTO), there are strict rules that limit the interference in trade relationships.

The WTO promotes the liberalization of world trade, but without making direct requirements for tariffs. Under the Obama regime, the United States criticized the effectiveness of the WTO rules, especially with regard to China's unfair subsidies and trade practices. It remains to be seen how the current customs policy will influence the future and stability in world trade, and whether the Trump himself as president can maintain support for his course.