Trump’s Tariff War - Donald Trump Deserves Nobel Prize In Economics

Trump’s Ingenious Approach to Leverage Trade:

Pakistan, the country with the distinction of harboring architects of the 9/11 attacks in America, as claimed by the US itself, is credited to be the first to formally nominate President Donald Trump for the Nobel Peace Prize on June 21, 2025, followed by some other peaceful countries such as the Democratic Republic of Congo, Israel, Cambodia, Armenia, and Azerbaijan. Trump did not hide his aspiration through a post on social media, Truth Social, on the same day: “I won’t get a Nobel Prize for stopping a war between India and Pakistan,” a claim repeatedly refuted by India, irking the world’s most powerful leader. The White House reiterated later that he merits consideration for the Nobel Peace Prize. However, Donald Trump himself conceded: “They would never give me a Nobel Peace Prize. It’s too bad, I deserve it, but they would never give it to me,” revealing his inquisitiveness for the coveted recognition.

While several countries are debating his suitability for the Nobel Peace Prize, there would be hardly any difference of opinion on his ingenious approach to leverage international trade by imposing tariffs on countries, friends and foes alike. Despite several erudite trade theorists and researchers preaching free trade, President Trump firmly believes that free trade is indeed detrimental to the interests of common US citizens. He never minced his words that “Tariff is the ‘most beautiful’ word in the Dictionary,” and imposing tariffs on other countries would revive manufacturing, bring back jobs in the US, and facilitate reduction of trade deficit to boost its economic growth.

Contrary to most economic theorists promulgating tariff reduction and free trade, Donald Trump leaves no stone unturned to demonstrate that he “loves tariffs” and “deals,” and considers them an elixir to all ills across the world, even for issues as complex as the Russia-Ukraine, India-Pakistan, or Thailand-Cambodia armed conflicts. Trump’s unassuming economic strategy has baffled not only countries with trade rivalry, such as China, but also its long-standing friendly strategic and economic partners such as the EU, Canada, India, and Mexico.

Trump Rattles Established Trade Theories:

Trade has taken center stage since President Donald Trump came to power with a promise of transforming the American economy, creating jobs, and raising the economic well-being of its citizens. Donald Trump came to power with massive support on his “America First” slogan that captivated the imagination of millions of voters who endorsed his ideology to “Make America Great Again.” Trump’s promise to uplift economic standards indeed mesmerized US voters, especially in the American hinterland.

In quest to achieve rapid economic gains, Trump’s trade doctrine adheres to the 16th-century-old “mercantilist theory” that emphasizes increasing trade surplus by increasing exports and reducing imports using all means. As a matter of historic fact, this led European merchants to expand their imperialistic powers through trading giants such as the British East India Company. However, Adam Smith, in his classic book Wealth of Nations, labeled mercantilism as a “dead” theory and demonstrated that wealth comes not from hoarding gold but from productive labor and free markets. However, President Trump’s resolve is to solve 21st-century problems with 16th-century theoretical concepts, with the notion that the US should export more and import less, axe trade deficits, and create huge trade balances as early as possible.

Several coveted economists have spent their lifetimes researching free trade doctrines, employing complex mathematical modeling and econometric tools to prove that free trade is beneficial for the welfare of economies. Fundamental economic trade theories of absolute advantage, comparative advantage, or factor endowment promulgate free trade to achieve factor efficiencies for overall economic welfare and growth.

“Liberation Day” tariffs announced by US President Donald Trump on April 2, 2025, on friends and foes alike revealed his formidable obsession with tariffs to achieve his dream to revitalize the American economy and create jobs and prosperity. His obsession with imposing tariffs in an erratic manner, with complete disregard to the prevailing well-established world economic order under the aegis of multilateral organizations such as the WTO, is fast rattling the world trading system and trade practices. Moreover, his speed of tariff decisions and lack of consistency have thoroughly perplexed policymakers and coveted trade strategists worldwide.

Predictable Unpredictability: Key to Trump’s Leadership Style

“Unpredictability” is the only predictable attribute of US President Donald Trump, his personality, style of functioning, and administration. Trump’s exasperating trade strategy in international negotiations is based on getting access to developing countries’ markets by tariff reduction on one hand while increasing non-tariff trade barriers in the name of quality, environment, sustainability, labor, and many more innovative trade barriers.

Despite tariff reduction under most US deals signed, the minimum baseline of 10–20% has become a norm but may go up to 50% or above with hardly any upper limit, from 2.2% weighted average and 3.34% simple average tariffs in the pre-Trump era. Moreover, these tariff concessions come as a bundled package for its trade partners to buy strategic goods such as energy, aircraft, defense goods, and agriculture from the US, irrespective of their cost implications. It makes it obvious that countries are coerced to sign trade deals with the US under a multiplicity of pressure tactics. Most commitments under these agreements raise doubts, as these are often vague and non-binding.

Amid Trump’s consistently inconsistent threats of reciprocal tariffs and explicit arm-twisting, ever since he took the reins of power in the US, countries across the world got severely disarrayed about their trade strategy. Trade deals and tariff negotiations are being frequently associated with diverse non-economic issues, ranging from immigration, drug smuggling, and challenging US currency in the BRICS to trading with countries of his dislike such as Russia, Venezuela, and Iran, and ever-emerging innovative demands apparently governed by whims and fancies.

His blatant disregard for established multilateral systems such as the WTO, whose foundation is based on promoting free trade by way of tariff reduction, reducing non-tariff barriers, and applying uniform tariffs under its MFN (most-favored-nation) treatment, created palpable anxiety among economists and policymakers worldwide alike, for which President Trump deserves the world’s most prestigious accolade, the Nobel Prize in Economics too.

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