Michelle ThompsonWhenever Donald Trump has proposed imposing significant tariffs on imports to the U.S., many have assumed they would be postponed, reduced, or reversed.
Today, in the White House Rose Garden, he will not only emphasize his commitment to what he calls “the most beautiful word in the dictionary” but also signal a major shift away from decades of economic globalization.
There remains a possibility that he will achieve this by effectively launching a shockwave through the global trade system—potentially imposing a blanket tariff on all imports to the U.S.
A 20% universal tariff appears to be the only way to generate the trillions in revenue that some of his advisers have projected.
In recent days, President Trump has insisted that tariffs will be “reciprocal” and that the U.S. will take a more lenient approach toward its trade partners.
However, this does not eliminate the possibility of broad tariffs at rates of 10% or 20%, especially if the U.S. considers Value Added Taxes as trade barriers.
Countries could potentially be grouped into broad categories under a largely universal tariff system. As one G7 negotiator noted over the weekend, “it all comes down to President Trump.”
If such a system were implemented and met with global retaliation, the UK economy could contract by 1%, erasing growth and prompting either tax hikes or spending cuts.
Globally, the economic impact could reach $1.4 trillion (£1.1 trillion), according to a study by Aston University Business School, as trade shifts and prices rise. Some within the industry anticipate the European Union may target U.S. tech companies, while the UK could take a different approach—potentially refraining from retaliation and instead offering tax incentives to major U.S. tech firms.
Trade wars are difficult to win but easy for all sides to lose.
A universal 20% tariff—or an equivalent measure—would represent an unprecedented shift in the global trading system.
Yet, there is a broader context. Vice President JD Vance stated last month that, in the administration’s view, globalization has fallen short of expectations. The assumption was that wealthier nations would advance in the value chain while lower-income countries handled simpler manufacturing, but this has not materialized, particularly concerning China.
With this reality in mind, the U.S. is pivoting away from globalization.
If today’s measures drive U.S. allies away, China may be ready to step in. American businesses in Europe could face setbacks, while cheaper electronics, clothing, and toys redirected from the U.S. market could ease costs for UK consumers.
The actions set to unfold today are not only intended to reshape America’s economy and trade policies but also to redefine the global order itself.
