Trump 2.0: Why Another Term Could Tank the global economy!
Trump's Trade War Threats: A Recipe for Global Economic Disaster?
A second Trump presidency? Economists are sweating. His plans for massive tariffs on imports could trigger a global trade war, tanking economic growth worldwide! It's not just a "maybe" either, those specific proposals from the candidate could seriously cripple various economies if those policies were to come into full effect, leaving everyone involved severely impacted in very significant ways, impacting every individual around the world. We’re talking a potential repeat of the Smoot-Hawley Tariff Act of 1930 — which played a seriously major role in deepening the Great Depression — except way, way worse. The sheer magnitude is shocking. Trump wants tariffs between 10-20% on all US imports— a HUGE leap from the current average of 2% (half are currently duty-free)!
For China? He’s proposing a jaw-dropping 60% tariff! This plan is crazy ambitious! But also deeply concerning; demonstrating the level of extreme views proposed by this politician which has previously worked in many scenarios before, and would likely trigger an almost immediate set of negative reactions, likely impacting even allies as much as it would impact its more traditional enemies. Trump himself loves tariffs, calling it his favorite word. Economists? Not so much.
Tariffs: A Tax on Everyone!
Economists largely disagree with this statement, emphasizing several very negative consequences surrounding such actions: those tariffs act like a tax on imports – hurting American consumers and businesses relying on imported goods. That would impact pretty much everyone! The Peterson Institute for International Economics warns those plans could lead to “worldwide trade wars, damaging global economic welfare and undermining national security." The predicted effects? Mostly bad, ranging in magnitude.
UBS analysts estimate a 60% tariff on Chinese imports, combined with a 10% tariff on the rest of the world, slashing global growth by a percentage point in 2026! That's nearly a one-third reduction in growth! Company profits could tank, and global stock markets would suffer badly (particularly European and emerging markets)—destroying peoples' savings! This alone sounds rather extreme; demonstrating those risks and losses even from simple estimates of financial damages, leaving no area unthreatened.
Europe: A Massive Blow From Trump's Policies
Europe would get absolutely smashed. If those tariffs hit 10% across the board, the eurozone’s GDP would get hurt badly – about as bad as the energy crisis from Russia’s invasion of Ukraine. The Dutch bank ABN AMRO predicts stagnation by 2026. Even an almost completely self-contained economy would get hurt. This is extremely problematic!
The International Monetary Fund (IMF) agrees, showing that potential global tariffs greatly harming outputs. The agency said last year that in a serious trade war scenario with wider tariff hikes and trade restrictions, global output could plunge 7% over time! That's equivalent to the combined GDP of Germany and Japan! That is huge! Those words like “catastrophic” are extremely relevant here and those consequences become extremely obvious for any country, especially those directly reliant upon international commerce in the various industries related!
Beyond Tariffs: Threatening the Federal Reserve's Independence
Economists have further serious concerns surrounding Trump's plan for the Federal Reserve (Fed). While Trump dodged questions about removing Fed Chair Jerome Powell, he’s threatened it before— claiming Powell keeps “rates too high.” His claim is: “I don’t think I should be allowed to order it but I think I have the right to put in comments as to whether or not interest rates should go up or down.” This would fundamentally change the game, fundamentally destroying the already existing relationship and any pre-existing trust! Investors would be massively freaked. Weakening the Fed’s independence seriously risks shattering global financial markets, destroying any confidence and that makes the global dollar instability— since it’s that massively crucial world currency.
Any interference with this hugely important organization’s structure will leave a highly negative impact and completely devastate all of those relying on it; that would destroy global trade patterns. Messing with that system has "no good substitute." Any alteration to this kind of power system and reliance would lead to huge and deeply devastating issues which will deeply damage all relying on it!
A 'More Radical' Trump 2.0: Economists’ Worst Fears
Experts worry this is more extreme than the first time! Previously, there were “more conventional Republicans” acting as checks on his impulses, according to Edward Alden, from the Council on Foreign Relations. But a second term means “none of those people…will have a job” so no constraints would even be enforced and nothing will possibly slow things down!
That makes Trump 2.0 “much more unbound” according to Alden. Essentially there is absolutely nothing possible to rein him in; a worrying insight; a highly likely reality where those policies proposed earlier might actually work in such an unconstrained scenario!
Conclusion: A Looming Economic Storm
A second Trump term means increased trade protectionism; severely weakening those principles for open trade and economic growth which had been instrumental to previous progress. His actions, as described through this article, combined with the possible effects predicted demonstrate a terrifying possibility! The risks described are not a game. And it’s not just some minor setback! This scenario suggests a deep and serious risk! Economists are almost uniformly negative, which creates many difficulties for potential planning. His actions and potentially enforced trade protectionist actions would impact everyone involved!
