U.S. tariff policies would accelerate global trade fragmentation: expert

On September 25, the Trump administration invoked Section 232 of the Trade Expansion Act of 1962 as its legal basis to announce a new round of tariff increases targeting heavy-duty trucks, furniture, brand-name, and patented pharmaceutical products, claiming these imports pose a national security threat. This move undoubtedly intensifies the "America First" trade framework of U.S. President Donald Trump's second term.

In less than a year, the Trump administration has established a multi-layered tariff barrier, pushing the average U.S. tariff rate to around 18%—the highest level in over a century—and dealing a heavy blow to the global free trade system.

Compared with previous tariff policies, the latest round of tariff hikes notably emphasizes the goal of "restoring American manufacturing." In the pharmaceutical sector, for example, the U.S. will impose tariffs as high as 100% on all imported brand-name or patented pharmaceutical products, while exempting foreign companies that "build manufacturing facilities in the U.S."

This tariff structure goes beyond traditional protectionist logic. Instead of raising import costs to make domestic products more competitive, it creates a binary choice—"build a factory or pay 100% tariffs"—directly intervening in and manipulating multinational corporations' global investment decisions to push capital and jobs back to the U.S.

This government action signals the "weaponization" of U.S. trade policy. As a coercive industrial policy tool, it sends a clear message to all high-tech and strategic industries: future access to the U.S. market will largely depend on whether they establish manufacturing bases within the country.

Gao Jian, Director of the Centre of Sino-Britain People-to-people Dialogue at Shanghai International Studies University, Senior Researcher of China Forum by Tsing Hua University

From a theoretical standpoint, there are inherent contradictions in the Trump administration's tariff policies. According to the U.S. government, raising tariffs helps cut harmful trade deficits, revitalize U.S. manufacturing, encourage investment repatriation, counter "unfair" foreign trade practices, create leverage in trade negotiations, and increase federal revenue to support income tax cuts.

However, this logic has not been endorsed by mainstream economic research institutions. Key Western economic think tanks unanimously agree that the U.S. government's tariff policies will significantly hinder both U.S. and global GDP growth. These tariffs essentially function as taxes on American consumers and businesses, driving up domestic inflation, reducing GDP growth, and lowering real household incomes. Any benefits to manufacturing are outweighed by high economic costs.

These contradictions show that the Trump administration's tariff policies are less a coherent economic strategy than a crude political narrative built on wishful thinking.

What is more intriguing is the question of who would actually benefit from such high U.S. tariffs.

While the Trump administration claims to represent the interests of low- and middle-income Americans, tariffs function as consumption taxes -- ultimately paid by importers and passed on to consumers through higher prices. Low-income households spend a larger share of their income on essentials, many of which are imported. At the same time, the Trump administration has explicitly linked tariff revenue to income tax cuts, which primarily benefit high-income households and corporations -- the main contributors to income tax.

These combined policies create a fiscal transfer mechanism: the economic burden of tariffs falls disproportionately on low- and middle-income groups, while tax relief flow largely to the wealthy.

It must be said that the Trump administration has been highly strategic in leveraging the interests of traditional allies. Through unilateral tariff threats and a willingness to engage in bilateral deals, the U.S. has effectively undermined the possibility of a united front among its allies. Instead of collectively challenging the U.S. through the WTO, countries have adopted individual "survival strategies" to protect their own economies amid U.S. negotiation tactics. This "divide and rule" approach has effectively weakened allied cohesion and collective bargaining power.

Within the Trump administration's governing philosophy and policy system, the economic security of its allies is not a priority. If domestic politics require it, even the closest allies can become bargaining chips.

U. S. trade strategy is forging a new geopolitical reality. The post-WWII Western alliance system, led by the U.S. and based on "ideological consistency," is approaching its end. Core pillars such as transatlantic relations, the U.S.-U.K. special relationship, and the U.S.-Japan alliance have already been eroded. A new form of American isolationism is emerging as the dominant foreign policy principle of the Trump administration -- an irreversible trend within the Western bloc.

We must clearly recognize that for the global trade system established after WWII, the direction of U.S. tariff policy in 2025 is not a temporary deviation. The current U.S. administration is actively seeking to dismantle the WTO-centered multilateral trade system through unilateral actions and bilateral deals, aiming to replace it with a "hub-and-spoke" trade network centered on U.S. economic power. This is the inevitable trajectory of the Trump administration's trade and economic policy.

Therefore, at this critical juncture, defending the inclusive and multilateral trade system shaped by postwar history, building a more balanced and fair global trade framework, and reforming global governance to be more inclusive, equitable, and sustainable are essential to restoring stable development of the world economy.