Trump's Tariffs Shock: Why They're Dumb Isn't What You Expect!

A Global Deception: Trump’s Approach to Trade

On April 2, Donald Trump enacted a national emergency, imposing comprehensive tariffs on almost every import. The news was filled with headlines about tariffs targeting China, along with allies such as Canada and Mexico, covering a range of products from automobiles to coffee. The Trump administration portrayed this decision as a patriotic move towards “reciprocal trade” and national economic independence.

Yet, this is not a breakdown of “free trade.” It is merely the perpetuation of corporate globalization with a MAGA branding.

Trump claims to champion American workers. However, he is the same leader who endorsed the United States-Mexico-Canada Agreement (USMCA), labeling it the “fairest, most balanced, and beneficial trade agreement ever passed.” This updated version of the North American Free Trade Agreement (NAFTA) — despite some amendments pushed by congressional Democrats and various organizations — continues to suffer from fundamental flaws that facilitate outsourcing, boost corporate power, and restrict governments from protecting their citizens and environments.

Trump is not discarding the corporate trade framework. He’s merely exploiting it.

For years, “free trade” agreements like NAFTA have entrenched provisions favoring multinational corporations, making it simpler to move jobs overseas, weakening environmental standards, and prioritizing the rights of investors over those of workers. This has led to stagnant wages, deserted industrial towns, and growing economic disparity, all of which Trump has repeatedly manipulated.

While tariffs might be part of a solution to these issues, Trump’s clumsy approach is ineffective. It lacks a coherent industrial strategy, labor protections, or environmental safeguards. It is simply a brash, unilateral action that fails to address the underlying corporate structures that continue to manipulate the global economy.

Combine this “pretend plan” with his broader agenda: cutting investments in crucial areas such as biomedical research, basic science, and sustainable and affordable energy technologies; reducing efforts to address child labor and other serious labor rights abuses globally; providing tax breaks for the wealthy and corporations; eroding healthcare, food assistance, and other essential services for vulnerable Americans; attacking Social Security, and weakening the influence of labor unions.

Clearly, workers are not the beneficiaries in this scenario.

Who Really Sets the Rules? U.S. Corporations, Not Foreign Powers

Trump often points fingers at other nations, accusing global trade of having “looted, pillaged, raped, and plundered” the U.S. economy during his “Liberation Day” speech. He portrays the U.S. as a victim of international exploitation, supposedly being “too generous” in return.

The reality is quite the opposite — the neoliberal trade regime has been skewed to benefit major corporate interests in the Global North, while workers in the U.S. and globally have suffered. Entities like Wall Street, Big Tech, and other massive U.S. corporations have consistently emerged as victors.

For decades, U.S. corporate lobbyists have leveraged their exclusive access to secretive trade negotiations to skew the rules in their favor, aiming to maximize profits at the expense of workers, small businesses, and the environment.

They have pushed for extreme intellectual property rights strengthening Big Pharma’s monopolies which keep drug prices exorbitantly high, with fatal outcomes. They have advocated for open capital markets and deregulated financial flows for Wall Street, securing regulations that allow agricultural conglomerates to overwhelm foreign markets with subsidized U.S. goods, displacing millions of farmers and causing forced migration.

True trade justice requires more than ill-conceived tariffs. It calls for systemic changes: enforceable labor rights, environmental safeguards, robust supply chains, and genuine democratic oversight. Trump offers none of these.

Meanwhile, they ensured that governments could not support local industries, enhance labor standards, or bolster environmental protections without being accused of “distorting trade.” The consequence has been a ‘race to the bottom’ for workers and communities, at home and abroad, while corporate giants reaped record profits.

It is crucial to recognize that Trump is misidentifying the real culprits of the flawed global trade system, leading to misguided solutions.

Once we acknowledge that multinational corporations are the architects of the current system, we can move towards appropriate solutions — not indiscriminate, high tariffs based on simplistic formulas, but a new trade policy that prioritizes the interests of workers, consumers, and the environment.

From NAFTA to USMCA: Same Corporate Dominance with Minor Tweaks (No Thanks to Trump)

Trump has long criticized NAFTA as the “worst trade deal ever made,” tapping into legitimate concerns of workers and communities damaged by its consequences. He campaigned on a promise to scrap it and replace it with a superior arrangement for labor.

However, once in office, he chose to renegotiate and rebrand the agreement as the USMCA, which he then declared to be “the best trade deal in history.” Now, contradictorily, he asserts that the USMCA has been a failure that can only be rectified by imposing harsh “retaliatory” tariffs on Canada and Mexico.

In truth, while some enhancements were negotiated into the agreement, the USMCA largely maintains the core principles that made NAFTA so detrimental. It expands corporate privileges, curtails democratic scrutiny, and undermines public safeguards in favor of increased trade.

The new labor provisions — often highlighted as evidence of a “new era” in trade — were not originally included in Trump’s proposal. They were secured through months of intense advocacy and negotiations by House Democrats, labor unions, and civil society groups.

Congressional Democrats, closely allied with the AFL-CIO, drew a firm line. Supported by persistent organizing from groups like Public Citizen, the Communications Workers of America, United Steelworkers, and a transnational coalition of Mexican and Canadian labor and civil society partners, they made it clear: they would block any deal lacking meaningful labor enforcement and the removal of harmful Big Pharma concessions.

Trump’s team preferred language that maintained corporate advantages and offered only token acknowledgments of labor rights. However, ultimately, they yielded to congressional Democrats’ demands. They included critical mechanisms like the facility-specific Rapid Response Mechanism for labor enforcement and removed some of the most egregious concessions to Big Pharma.

Yet, the structural flaws from NAFTA persist. While experts from various ideological backgrounds praised the significant reduction of controversial investor privileges that allow corporations to sue governments over public interest laws through investor-state dispute settlement (ISDS), Trump retained ISDS for fossil fuel companies operating in Mexico — a provision aggressively advocated for by Big Oil.

Agribusiness still retains its influence. The ongoing U.S. trade challenge to Mexico’s restrictions on genetically modified corn — steps rooted in precautionary health standards and cultural preservation — illustrates the true intentions of the deal. Instead of respecting national policy space over food safety, trade rules are again being used to dismantle domestic protections at the behest of corporations.

Not only did Trump fail to correct NAFTA’s issues, but he also worsened them in at least one significant way: Big Tech secured its wishlist in the form of a digital trade chapter. These new terms weaken the ability of U.S. states, Congress, and other countries’ governments to hold Big Tech accountable for gender and racial bias in AI, rampant privacy abuses, and monopolistic practices.

“Protectionism” as Theater and the Authoritarian Trade Strategy

Far from dismantling the corporate trade regime, Trump’s tenure revealed him as a devoted proponent of it — as long as he could attach his name to it. Despite the USMCA rebranding, he left the core NAFTA structure intact and continued to fuel public outrage over the struggles of working people — not by addressing the root issues but by blaming other countries. He has increasingly used tariff threats as his preferred tool — not in the pursuit of fairness but as a blunt instrument of control.

Recently, Trump threatened new tariffs unless Mexico deployed troops to militarize the border. He pressured Colombia to accept a deportation flight of asylum seekers.

Big Tech companies are anticipating their benefits, as it is widely expected that Trump will remove tariffs on countries that agree to eliminate tech accountability policies.

Ironically, he is using tariffs as a lever to coerce other countries into signing the very liberalizing trade agreements he claims to oppose.

“Liberation Day” was more of the same from this increasingly authoritarian White House: an emergency decree circumventing Congress, escalating instability, and centralizing power in the executive branch. Trump hasn’t rejected the undemocratic nature of the neoliberal trade model — he’s replicating it with a vengeance.

All Show, No Substance

While tariffs can be a beneficial tool, they should be transparently applied in strategic sectors for specific purposes following thorough analysis and open discussion.

However, Trump’s tariffs are based on misleading data and faulty reasoning. He uses exaggerated trade deficit figures and remains silent on how the U.S. dollar’s dominance allows America to import far more than it exports, a privilege most nations in the Global South cannot afford due to debt and structural trade deficits.

The methodology behind these tariffs has left experts baffled.

Trump claimed that the “reciprocal tariffs” were derived from a detailed assessment of each country’s tariff and non-tariff barriers. In reality, the number assigned to each country seems to be based on the difference between the total value of imports the U.S. receives from a country versus the amount we export to it.

No consideration was given to why there might be a significant imbalance. For instance, Lesotho, which Trump dismissed as a country “nobody has ever heard of,” was assigned the highest tariff of any country at 50%. This ignores the fact that the small, landlocked country’s population of 2 million may not be able to afford Made in America products, leading to a skewed trade balance.

The simplistic formula used to determine each country’s “reciprocal” tariff was described by Nobel Prize-winning economist Paul Krugman as something that seemed to be “thrown together by a junior staffer with only a couple of hours’ notice,” and “reads like something written by a student who hasn’t done the reading and is trying to bluff their way through an exam.”

As some commentators have noted, this tariff breakdown is what you might expect if you asked ChatGPT to devise a U.S. trade policy. This could very well be the first global economic policy written “of, by, and for” our robot overlords. What could possibly go wrong?

The Corporate Wishlist

Since the Trump administration clearly did not undertake the, admittedly Herculean, task of reviewing the thousands of tariffs and trade barriers imposed by hundreds of countries, it simply used trade imbalances as a crude proxy. It’s a stand-in for the cost of that country’s tariffs and, importantly, its non-tariff barriers.

“Non-tariff barrier” is trade-speak for “any policy that’s not a tariff” but might restrict trade — from climate protections to minimum wage laws to consumer protections in the form of toxic food additives. While many non-tariff barriers serve vital public policies, corporations and trade negotiators often treat them as obstacles to profit.

According to the April 2 executive order, Trump can unilaterally decide to lower the tariffs imposed on a country if it takes “significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters.”

What constitutes a “significant step” isn’t defined, but it certainly looks like an open invitation for governments to slash their tariffs and reverse policies to appease Trump and his billionaire friends.

For what exactly those policies may be, just look to the report Trump waved around at the beginning of his so-called “Liberation Day” tariff announcement speech in the Rose Garden.

That document is a 400-page list of the policies that other countries have enacted — or are even considering enacting — that U.S. corporations don’t like. It’s the National Trade Estimates Report on Foreign Trade Barriers, an annual government report that has long been criticized as an inappropriate overreach to name and shame other countries’ legitimate public interest policies. It’s also a glimpse of the policies that Trump may seek to have destroyed in exchange for tariff relief.

The policies targeted in this year’s report include climate protections, including Canada’s Clean Fuel Standard, the European Union’s Deforestation-Free Supply Chain Regulation, and Japan’s renewable energy incentives — all of which are aligned with global climate commitments.

Public health regulations aimed at protecting consumers, preserving biodiversity, and preventing long-term health risks were also attacked. Employed by dozens of countries, these include bans, testing requirements, or even labeling policies on pesticides like Roundup’s glyphosate, genetically engineered food, ractopamine in beef and pork, and heavy metals in cosmetics.

Regulations that promote competition in the digital ecosystem, laws that impose digital services taxes on Big Tech firms, place conditions for cross-border data transfers, promote fairness in the digital economy, and laws that regulate emerging technologies such as AI.

Benefits for Trump’s Circle

Countries are not the only ones who will seek to circumvent the full impact of Trump’s tariffs. Despite Trump’s assertions that other countries bear the cost of tariffs, it is U.S. importers who must pay this fee — unless they can persuade Trump to grant them a special exemption.

It is well-documented that the opaque and chaotic tariff exclusion process established in Trump’s first term quickly overwhelmed government agencies and enabled a quid pro quo system that favored the wealthy and well-connected. A revolving door of lobbyists, including former and future Trump administration officials, were able to secure lucrative tariff exemptions for their CEO clients through political pressure, informal meetings, and campaign contributions.

Trump’s recent actions had nothing to do with “liberation.” You can’t fix a rigged trade system while maintaining its rules and antagonizing people at every turn.

Through this system, Trump wielded tariffs and tariff exemptions to reward his allies and penalize his adversaries. CEOs who donated to Republicans had a 1 in 5 chance of having their exemption request granted versus 1 in 10 for CEOs who supported Democrats, according to a January 2025 study.

If Trump’s recent attacks on law firms, universities, and the press are any indication, he’s prepared to double down on using his second term to punish opponents and enrich himself and his friends. And his dismantling of oversight agencies and strengthening of big business ties set the stage for tariff exemptions to be even more corrupt and detrimental to workers, consumers, and the U.S. and global economy.

What other demonstrations of political loyalty might companies offer Trump for a tariff exemption this time around? Public endorsement of his policies? Promises to monitor employees for DEI ideologies or views critical of the administration?

We Deserve Better

Trade justice requires more than poorly designed tariffs. It calls for systemic reform: enforceable labor rights, environmental safeguards, resilient supply chains, and genuine democratic oversight. Trump offers none of these.

There’s no industrial strategy. No support for unions. No vision for climate resilience. Just a chaotic, performative tariff regime, which in practice will surely be wielded to reward loyalty and punish dissent.

Trump’s recent actions had nothing to do with “liberation.” You can’t fix a rigged trade system while maintaining its rules and attacking people at every turn. Trump talks a big game but serves the same corporate interests that undermined labor rights in the first place. Working people deserve a system centered on them, not one that favors corporations.

This isn’t trade justice. It’s a sham.

Trump’s Tariffs Shock: Why They’re Dumb Isn’t What You Expect!