Trump’s Threatened Tariffs Are So Large, 10% Feels Like a Relief

## Introduction

The Trump administration's trade policies have consistently made headlines, especially its aggressive stance on tariffs. One of the most debated aspects of these policies is the scale of the tariffs threatened against major trading partners like China and the European Union. Interestingly, the magnitude of these threats has been so substantial that when the proposed tariffs were set at 10%, it almost seemed like a relief to global markets and economic observers.

#### Understanding the Tariff Strategy

Trump's approach to tariffs was primarily aimed at reducing the trade deficit and bringing manufacturing jobs back to America. His administration believed that imposing higher tariffs on imported goods would encourage domestic production and reduce dependency on foreign markets. However, the scale of the threatened tariffs often reached as high as 25%, which would significantly impact international trade dynamics.

The idea behind this strategy was to pressure trading partners into more favorable trade agreements. For instance, tariffs on steel and aluminum were used as leverage in negotiations with Canada and Mexico during the reformation of NAFTA into the USMCA. Similarly, China faced a series of escalating tariffs that targeted goods worth hundreds of billions of dollars.

#### Why 10% Feels Like a Relief

Amidst the trade war threats, when the administration hinted at a 10% tariff instead of the initially considered 25%, many economists and business leaders saw it as a mild outcome. A 10% tariff, while still impactful, is far less disruptive than a 25% hike, which would likely cause sharp increases in consumer prices and strain on supply chains. For businesses accustomed to the looming threat of much larger tariffs, 10% seemed manageable in comparison.

Moreover, global markets, which had been bracing for harsher impacts, responded with relative optimism. Stocks stabilized, and companies began adjusting their strategies to accommodate the smaller hike. The psychological effect of expecting something worse and then facing a less severe reality played a major role in this perception.

#### Impact on Global Trade

The 10% tariffs, though less severe than the feared 25%, still had implications for global trade. Importers in the United States had to absorb higher costs, some of which were passed on to consumers. American exporters also felt the squeeze as retaliatory tariffs from affected countries made U.S. goods more expensive abroad.

Countries like China responded with their own set of tariffs, targeting American agricultural products and technology exports. This back-and-forth trade conflict led to disruptions in global supply chains and shifts in manufacturing bases as companies sought to minimize tariff costs.

#### The Bigger Picture

Trump’s tariff threats were part of a broader strategy to renegotiate trade terms and assert American dominance in global trade. While the immediate impacts were mixed, the long-term effects reshaped global trade alliances. Some countries began exploring deeper economic ties with other nations to reduce dependency on U.S. markets.

Additionally, the move sparked debates over the effectiveness of tariffs as a tool for economic leverage. Critics argued that the costs were largely passed down to American consumers, while supporters claimed it brought necessary pressure to address unfair trade practices.

#### Conclusio

Trump’s threatened tariffs were undeniably large, and when set at 10%, they were almost seen as a relief by those who had anticipated far greater economic disruptions. Although the strategy stirred controversy, it also highlighted the profound impact that U.S. trade policies can have on the global economy. As trade relations continue to evolve, the lessons from this era remain a critical point of analysis for policymakers and economists alike.