BIG READ: Americans sour on Donald Trump’s trade tariff sorties

Donald Trump took office expecting to inflict short-term pain for long-term gain, but it’s hard to believe he could have expected the level of damage to the US’s brand or his own polling numbers.

A weekend CNN poll has his support down to 41%, well below the 44% at this stage of his first term, which was itself well below the lowest of any modern president at the same stage.  

The moves are the more dramatic because, unlike in his first presidential term, Trump entered the White House with the most positive polling he has seen.  

His tariff policy ignited a global trade war that put US stocks on a rollercoaster towards bear territory, then sharply up when he paused some. More unusual, US bonds and the dollar both fell at the same time, reflecting at least short-term loss of confidence in America.

His first 100 days included mass government firings, defunding major universities and law firms, undermining courts and instilling fear into members of the US media. 

As a result, even in areas where he does best — the economy and immigration — he polled in negative territory. And less than half those polled was confident that he would use the powers of the presidency responsibly. 

The disruptive effect of his actions on political leaders around the world has been traumatic. Friends and enemies feel compelled to reimagine their place in the world in the light of his presidency. “The West as we knew it no longer exists,” said EU president Ursula von der Leyen.  

What will the new order look like? How are other countries fighting back? What lessons must SA learn? 

The dilemma for SA is particularly cruel, even if the ANC’s sometimes tone-deaf policies opened them to unnecessary risks. Since the 1940s, ANC foreign policy supported the UN for its commitment to self-determination and multilateral conflict resolution.

Our 30-year-old democracy is based on constitutionalism and an independent judiciary, while Trump has insulted judges whose rulings he disliked and called for one to be impeached. Two US judges were arrested last week.

He dismissed international treaties, even ones he had signed in his first term, like his own trade deals with China, Canada and Mexico. He withdrew formally from the World Health Organisation; he simply ignores the World Trade Organisation. 

The speed and scope of his actions left adversaries at home and abroad in disarray. 

“Trump’s executive orders set fire to so many trees,” said senior Barack Obama campaign adviser David Axelrod, “that the Democrats are still trying to work out where to point the fire-hose.”  

Political resistance at home will be tested only in November 2026, when Democrats hope to turn Trump’s unpopularity into a Democratic majority in the House of Representatives. To get there, a new generation of younger Democrats is pressuring the old guard, many in their late 70s or 80s, to step down because they lack the weapons for this fight.

What does Trump actually want? 

Pretoria’s confusion about how to satisfy Trump is echoed around the world. His statements are hard to interpret. This week he told Time magazine that when he said during the campaign, repeatedly, that he would end the Ukraine war in a day, he was speaking “in jest”.

He promised 90 trade deals in 90 days, but trade agreements normally take at least 18 months. Many countries have stalled serious talks because his demands have been vague, varied and sometimes contradictory.

When questioned about his 90 trade negotiations, he increased the number, saying he had 200 deals on the go.

His reasons for the tariff war vary.

When he first imposed punitive tariffs, his reason was the drug fentanyl coming across borders. Later it was because the US was being cheated.

Once he showed the chart of different tariffs for each affected country, almost every economist outside the Trump orbit dismissed his formula as devoid of theoretical logic.

So what is behind this chaos?

The consistent theme is that he fears America is losing its position as the world’s leading nation, and it needs to lower government debt and expand the US economy relative to China’s.

Between 1950 and last year, the US went from 50% of global GDP to 26.11%, while China rose to 19.6%. China’s 30% share of global manufacturing is twice the US’s 15.1%. Applying purchasing power parity, which takes account of currency differences, China’s economy is already bigger than the US.

Trump aims to rescue this decline before China gets too far ahead, to be stronger than China, economically and militarily. That means a significant decoupling from the Chinese economy, even though China owns hundreds of billions in US bonds.  

Both Obama and Joe Biden had similar goals. They felt frustrated that resources were deflected by 9/11, and wars in Afghanistan, Iraq, Libya and Ukraine.  

Each wanted to “pivot to China” faster than they were able to. That helps explain why Obama was reluctant to go to war over chemical weapons in Syria or to aid Ukraine when Russia first attacked in 2014. It is also one of the reasons he was so keen to negotiate the Iran nuclear agreement, to refocus on China. 

Trump wants to settle Ukraine fast, and doesn’t mind breaking the rules to make the China pivot, slowing its economy by charging a heavy tariff on Chinese goods. 

Obama’s policy to contain China was built around the Trans-Pacific Partnership (TPP), a free-trade agreement among 12 Pacific Rim economies that excluded China.  

Trump 1.0 blew up both Iran and the TPP disagreement. Trump is now negotiating with Iran for an Iran nuclear weapon deal that seems remarkably similar to Obama’s. When Trump broke it, many commentators said it was because he did not want to endorse Obama’s achievement.

While Trump’s Iran negotiations seem to mirror Obama’s so far, his China trade policy is more of a counter-TPP. After Trump tore it up, China wasted no time building up its own trade ties with the countries that signed it.   

Obama’s TPP was a carrot to Asian countries to trade with the US instead of China. Trump’s “reverse TPP” uses the stick to threaten them and hobble their exports to the US. 

China is his real target

Trump’s threat to China on “liberation day”, April 2, laid down the law: If you want my tariffs reduced, come to me. Adding insult to injury, he boasted to the press about those that did — “60 countries are coming to kiss my ass”, he later preened with evident satisfaction.

But the most important one has defied him. 

Chinese President Xi Jinping has had the power, the pride and the will to take him on. Xi has made the calculation that responding to Trump’s threats exposes China to new threats.  

“We do not want to fight,” Xi’s spokesperson said. “But we are not afraid to fight. If it’s to fight, we’ll fight to the end. If it’s to talk, we’ll talk.” 

Now it is a game of chicken. 

The White House sent informal messages to Beijing — call and the president will negotiate. Xi rebuffed them. The markets went awry. Unlike in his first term, Trump seemed impervious to stock market falls that took the indices down close to 20%, bear market territory.

But when US bond prices fell, the fear of every US president, first because it raises interest payments on US government debt tens of billions of dollars, Trump reduced all tariffs but China’s to 10% for 90 days. The dollar fell too. 

Rumours in the market were that both Japan and China, the biggest foreign holders of US treasuries, were dumping. The price of a lost friend, in this case Japan, was being paid.  

Trump blinked, cutting the huge tariffs for all countries except China to 10%. Then he was lobbied by Silicon Valley, and he exempted Chinese-made iPhones and laptops.  

When Xi did not call, Trump told the press he had talked to Xi, and there was “active contact with China every day”. 

China reacted quickly. Guo Jiakun, the spokesperson for the Chinese foreign ministry, reiterated that China would not be bullied by US tariff threats. 

“China and the US have not held consultations or negotiations on the issue of tariffs,” Guo told the media. “The US should not confuse the public.”

US treasury secretary Scott Bessent, considered the “adult in the room” of this administration, tried to soften the administration’s position. “America first doesn’t mean America alone. There is an opportunity for a big deal,” Bessent said. “If China is serious on being less dependent on export led growth, rebalancing towards a domestic [Chinese] economy, let’s do it together.”

Away from the brink? 

Now comes the hard part. Washington insiders knew the bills would fall due soon enough. In his first 100 days Trump short-circuited Congress and the courts, which move slowly.

How Trump handles this phase —Congress, the multiple trade agreements, Ukraine’s peace talks — will affect the trajectory of the global economy and the fate of his presidency. 

Unlike other presidents, Trump has offered little important legislation in the first 100 days. His plan was disruption — to bypass Congress and the courts for as long as possible to create new facts on the ground, as he did with tariffs and with Elon Musk’s Department of Government Efficiency (Doge).  He bet on short-term pain for long-term gain. That US investment in manufacturing will surge, and he will save billions in waste. With revenue from tariffs, America’s long-term debt will be whittled away, and it will win the battle for supremacy with China.

Economists are sceptical. Right now, a global recession is a serious possibility. The IMF just cut its world growth forecast from 3.3% to 2.8% because of Trump’s tariff policy, and cut SA’s from 1.5% to 1%. 

“Global trade is grinding to a standstill with problems similar to what we saw during Covid: growing supply chain challenges with potential shortages in US stores within a few weeks, higher US inflation and lower tourism to the US,” said Torsten Slok, the chief economist at Apollo Global Management.

If the outcome of the trade war remains unknown, the verdict on Doge in. In October last year, Musk promised to cut $2-trillion from the US government’s $6.75-trillion budget. A while later he cut his promise in half, still a sizeable amount. But earlier this month he posted his claimed figure: only $150bn.

Several leading media houses immediately tested the details, and found only about $61.5bn stood up, but the arithmetic on even that amount seemed faulty. It did not account for the cost of cancelled contracts, early payouts and lawsuits that New York Magazine assessed at $135bn.

On the other hand, the damage Doge has done to US government efficiency is likely to be enormous, and take years to rebuild. Many who were fired were rehired. Hundreds of thousands took payouts and will not return, taking the skills and institutional knowledge with them.

What Doge achieved was not cutting much waste, fraud and abuse, but the long-term goal of many Republican think-tanks — to cut government services, including many services for health, education, USAID and the poor.

Two key tests of the administration’s real impact at home will be the Pentagon budget and the tax policy. Some in Trump’s movement demanded the defence budget be cut from $855bn to $500bn. They argue that stopping endless wars and cutting troops overseas will save a fortune. But another Trump faction already wants it increased to $1-trillion.

SA lessons — chainsaws or Afrikaner farmer exodus? 

President Cyril Ramaphosa and Trump had a phone call last week, and announced they would soon meet. Since Trump is in his more emollient mood, perhaps compromises are possible. 

Like other capitals, Pretoria struggles to decipher what would mollify Trump’s hostility.  

Perhaps he believes the claims that there is a white genocide, but I doubt it. He probably thinks that white farmers may be murdered in disproportionate numbers, even though the statistics show black and white farmers get murdered.  

If your farming skills are unappreciated in Africa, he is saying, come to America.

SA needs to review its economic priorities. Every significant country is reviewing their domestic economic policies in the light of the Trump shock.

Canada and Portugal have suspended multibillion dollar US F-35 fighter jet orders as bargaining chips, and Beijing suspended delivery of Boeing commercial jetliners. Victims of Trump’s tariffs are seeking new deals with each other.  

Most second-tier economies are planning large-scale expansion in military production and defence forces. Research & development spending in these areas will increase.

They’re also seeking responses to China’s emerging dominance in electric vehicles, renewable energy and AI.

Yet while the IMF downgraded our growth rate to well below the population increase, the government of national unity wasted weeks, and millions of rand, on a largely symbolic dispute over a 0.5 percentage point VAT increase.  

While Trump was alienating friend and foe, Xi was travelling around Southeast Asia making friends and expanding trade without tariffs. Harvard trade expert Prof Robert Lawrence told the Centre for Development Enterprise that China was likely to be the winner in this fight.

Trump “is more likely to ultimately strengthen China’s hand in the new world order”, Lawrence said. 

Humorists in Beijing agree. “Trump the nation builder … for China”, ran a meme on Chinese social media this week.  

• Matisonn is an author and political journalist and a former senior UN official.