Is America sinking others to keep itself a superpower?

Introduction

The modern global economy is a complex interconnected system in which the decision of one country can affect hundreds of countries. In this very fabric, the US is once again standing before the world with its trade weapon - tariffs (import duty). The tariff war that started with China has now spread to many countries and has now included allies like Vietnam, India, Mexico, Europe and even South Korea.

But is the US really protecting its industries? Or is this the beginning of a new kind of economic imperialism in which the superpower imposes its conditions on others? In this article, we will get to the bottom of this question.

1. Tariff war: What does it mean?

In simple words, when a country imposes additional tax on goods imported from another country, it is called tariff. And when this tax is imposed for a specific purpose - such as promoting domestic products, preventing foreign competition or creating pressure - it becomes a tariff war.

A tariff war is a kind of peaceful war, in which guns are not fired but hostility is shown through trade policies.

2. A glimpse of history: America and tariff politics

Tariff wars are not a new issue. During the Great Depression of the 1930s, the US implemented the Smoot-Hawley Tariff Act, which imposed heavy duties on more than 20,000 foreign products. This resulted in a huge drop in global trade and a situation similar to World War II.

In 2018, President Donald Trump again adopted this policy against China. He claimed that China was doing "unfair trade practices" - destroying American industries by sending cheap products. In this tariff war, the US imposed heavy duties on $370 billion of Chinese products. China also retaliated and imposed tariffs on soybeans, steel and other products.

3. Biden's economic policy: New face, old trick

Joe Biden may not have adopted aggressive language like Trump, but his economic policy is moving in the same direction. He has also imposed many new tariffs to promote "Made in America" ​​and to control China's technological power.

The Biden administration has become very strict especially regarding green energy, EV batteries, solar panels, and the microchip sector. There is a plan to impose up to 100% duty on EVs coming from China, so that American companies can survive.

4. Impact on global supply chain

When two big countries impose trade sanctions on each other, its effect is not limited to them only. Modern supply chains are so interconnected that the entire industry can come to a standstill due to the stoppage of delivery of one part.

For example, if cheap solar panels are not able to come from China, then clean energy projects in America will become expensive. Similarly, if the US imposes tariffs on the raw material of microchips, then the prices of everything from smartphones to cars will increase.

5. Impact on India and other developing countries

This situation is like a double-edged sword for emerging economies like India. On the one hand, the US wants India to become an alternative to China - that is, Indian factories should become the factories of the world. But on the other hand, the US also demands tax exemption from India and sometimes increases the duty on Indian products.

In 2023–24, the US had increased tariffs on Indian steel and aluminum products. In response, India also imposed tariffs on American products, but later both the countries reached an agreement. Nevertheless, it became clear that the US is pursuing a policy of balance of power, not just trade.

6. Situation of Europe and other allied nations

The European Union is feeling very uncomfortable with these policies of America. Tariffs on European vehicles and steel products have affected their exports. Countries like Germany and France talk of free trade with the US, but the US gives priority to domestic industry.

Countries like South Korea, Japan and Vietnam are strategic allies of the US, but they are also not untouched by the decisions of the US in the tariff war.

7. Role of WTO and global trade system

The job of the World Trade Organization (WTO) is to protect the rules in trade. But the US often ignores the recommendations of the WTO. China has filed complaints against the US in the WTO many times, but the results could not have any significant impact on the US policy.

In such a situation, the question arises - has power now become more important than rules in global trade?

8. Future prospects: solution or crisis?

If the tariff war continues like this, then the biggest loss will be to global economic growth. The IMF and the World Bank have already warned that such trade wars can lead to a decline of more than 0.5% in the world GDP.

On the other hand, this tariff war is also an opportunity for countries like India to promote Make in India - provided India strengthens its production capabilities, logistics, and export policy.

Conclusion

The US tariff war is not just a trade strategy, but has become a political and geo-economic weapon. It is becoming clear that economic globalization is now succumbing to nationalism.

While on the one hand the US claims to protect its industries, on the other hand it is also challenging the global trade system.

In today's era, tariff war is not a solution - it is just a temporary solution that