The only thing certain is uncertainty

Though just in the other side of the hemisphere, the political realities in the USA affects every country in the world. That is why a very popular phrase remain relevant today. “When America sneezes, the world catches a cold.”

Yet, such phrase may not be entirely true today. What is more appropriate should be, “When Trump sneezes, the world catches a cold.” Yes, because whatever he wishes and says becomes the law of the USA. Consequently, the rest of the world just seemed so preoccupied fending off every blow he throws that may come their way. 

Indeed, the truth is, all eyes are trained on President Donald Trump today. And being the leader (with dictatorial tendencies) of the world’s largest economy, Trump truly deserves the attention he gets. True enough, it only took one word to shake the entire world. That’s tariff. As to why he oft-repeatedly tells the world that he loves it dates back 1988. 

Actually, there is an old article from the New York Times that chronicled US President Donald Trump’s love for tariffs. That it all started in the late 80s. It started in 1988 when he lost in an auction for a 58-key piano used in the classic film “Casablanca” to a Japanese trading company for a collector. To him, it was a personal and stark reminder of Japan’s growing economic strength. Consequently, in the ensuing year, he went on television “to call for a 15% to 20% tax on imports from Japan.” 

That is why it is of no surprise that as the trade deficit rose by the day on his first term, Pres. Trump imposed a 25% tariff on around US$34 billion of imports, not from Japan but China, including cars, hard disks and aircraft parts on July 6, 2018.   

Unperturbed, history tells us that China retaliated right away by imposing a 25% tariff on 545 goods originating from the US worth US$34 billion, including agricultural products, automobiles and aquatic products. Several impositions and retaliations followed during the year.  Then on December 1, 2018, both Xi Jinping and Donald Trump agreed to a ceasefire at the G20 summit in Argentina. Suspensions on imposed tariffs by both camps ensued. 

The ceasefire wasn’t meant to even last for half a year, as negotiations broke down on May 10, 2019. Thus, reimpositions and retaliations followed. Then, on June 19, 2019, Xi Jinping and Donald Trump agreed to a trade war truce at the G20 summit in Japan, thus, delaying the imposition of new US tariffs. Lowering and suspension of tariffs ensued. And even during Pres. Biden’s term, the same tariffs where in effect. 

Now that Pres. Trump is back in the oval office, his love for tariff is even more pronounced. Supposedly, the only underlying reason for this is the fact that USA’s domestic production is less than its consumption. It simply means that its imports exceed its exports resulting to a burgeoning trade deficit. That by imposing tariffs, both US (instead of operating factories abroad) and foreign businessmen will opt to establish their factories in the USA (to avoid tariffs). Supposedly, as factories are back, jobs are generated. 

Moreover, he emphasized that tariffs are USA’s main weapon in accumulating wealth for the Americans and in taking revenge against countries whom he felt are taking advantage for decades.

Curiously, however, this time, he is no longer just fixated on China.  Even his country’s closest neighbors and allies (Canada and Mexico) aren’t spared. Likewise, the European Union and other friendly nations are hit by his sweeping 25% tariff on exports to the USA.

Notably though, unlike his previous war with China on his first term, tariffs aren’t the only issue. Illegal migration and fentanyl are also thrown into the mix. Worse, it is also wrapped with expansionist rhetoric like making Canada the 51st state, buying Greenland (to taunt Denmark) and renaming Gulf of Mexico to Gulf of America. 

While these rhetorics make us cast some doubts on his real motives, the fact remains that imposition of tariffs and the ensuing multiple reciprocal tariffs between the USA and the rest world will consume our day in the weeks or months to come. Every time it is imposed, prices will shoot up further to a point of unaffordability. Yes, and probably, to a point where only one-half (or even less) of the world’s population can afford even the most basic goods. Then, in the absence of demand, businesses will fold up and joblessness will prevail. Then, who knows what’s next?

Sadly, today, the only thing certain is uncertainty.