The writer is an economist, anchor, geopolitical analyst
and the President of All Pakistan Private Schools’ Federation
president@Pakistanprivateschools.com
Donald Trump has committed the most profound, harmful and unnecessary economic error in the modern era. Almost everything he said—on history, economics and the technicalities of trade—was utterly deluded. President Donald Trump’s tariff program, effective April 5, 2025, introduces a bold economic strategy with a 10% tariff on all imports, escalating to 25% for Canada and Mexico and additional levies on China. Aimed at reducing trade deficits and protecting US industries, this policy raises the average tariff rate to 18.8% %—the highest since 1933—potentially generating $1.8 trillion over a decade while shrinking US GDP by 0.5%, according to the Tax Foundation. However, its implications extend far beyond domestic economics, threatening global trade stability and the United States’ geopolitical influence, often termed “universal imperialism”—its capacity to dictate global trade norms. China also announced that it will impose its own 34 percent tariff on US products from April 10. Beijing also said it would sue the US at the World Trade Organization (WTO) and restrict exports of rare earth elements used in high-end medical and electronics technology. Trump warned that “China played it wrong,” saying this was something “they cannot afford to do”. British Prime Minister Keir Starmer also said he was ready to step in to help “shelter” the country’s businesses from the fallout of U.S. President Donald Trump’s new tariff policies, mooting state intervention for the worst-affected industries. Other major trading partners have held back as they continue to digest the unfolding international standoff and fears of a recession. China added 11 U.S. bodies to the “unreliable entity” list, which allows Beijing to take punitive actions against foreign entities, including firms linked to arms sales to democratically governed Taiwan, which China claims as part of its territory. The escalating trade war could lead to a recession as tensions between the U.S. and China continue to rise. Other impacted nations like Canada have also readied retaliation in a mounting trade war after Trump raised U.S. tariff barriers to the highest levels in more than a century, leading to a plunge in world financial markets. As a result, for the week, the S&P 500 fell 9.08%, the Nasdaq declined 10.02%, and the Dow fell 7.86%. The Russell 2000 Small Cap Index dropped 9.70%. Investment bank J.P. Morgan estimated a 60% chance of the global economy entering a recession by year-end, up from 40% previously. This is significant and is unlikely to be over, hence the negative market reactions. Investors are afraid of a ‘tit for tat’ trade war situation. Trump’s sweeping import tariffs could test the labor market’s resilience in the months ahead amid sagging business confidence. European shares also tumbled to their biggest weekly losses in years. Trump’s tariff program, while targeting trade deficits, carries profound risks. Higher prices, inflation, and GDP shrinkage threaten economic stability. Trade disruptions and retaliation could slow worldwide growth and fragment supply chains. Strained alliances and a fractured trade system may undermine US universal imperialism, mirroring Napoleon’s loss of control. Historical lessons from Napoleon’s Continental System and the Smoot- Hawley Tariff Act warn of economic missteps leading to geopolitical decline. The 2018-2019 tariffs’ $79 billion cost and $27 billion in export losses hint at the scale of 2025’s potential fallout. Trump’s tariff program promises significant domestic repercussions, with the Tax Foundation estimating a 0.5% GDP reduction over a decade, while Goldman Sachs projects a 0.4% drop from the Canada and Mexico tariffs alone. This reflects the cost of disrupted trade with key partners. Yale University forecasts a 1.4-5.1% rise in consumer prices, translating to $1,900-$7,600 per household annually. Historical precedent supports this: the 2018-2019 tariffs cost consumers over $1.5 billion for goods like washing machines, per the USITC. Lower-income households, spending more on imports, will bear the brunt, per Stanford SIEPR. The S&P 500’s decline in early 2025 following the tariff announcement signals investor unease over inflation and profit erosion, a reaction compounded by tariff announcements timed after market close to limit immediate fallout. To preserve its global leadership, the US must temper protectionism with cooperation, avoiding the pitfalls of overreach that felled Napoleon. Trump’s tariffs, if mismanaged, could mark an inflection point where economic dominance begins to slip, driven not by external foes but by self-inflicted wounds. Trump’s tariffs may raise US consumer prices, potentially impacting economic growth and jobs, with mixed effects on unemployment. It seems likely that these tariffs are escalating into a trade war, with countries like China and the EU retaliating, affecting global trade. The evidence leans toward some industries facing shutdowns due to higher costs, while others may benefit from protection, with varied impacts on businesses. Trump’s policies might be seen as reinforcing US economic dominance, raising debates about “US universal Imperialism” in global trade dynamics. Trump’s recent tariff program, including a 10% baseline tariff on all imports and higher rates on countries like China (up to 54% total), aims to protect American industries. However, this could lead to higher prices for US consumers, potentially slowing economic growth, and an estimated 1.3% reduction in long-run GDP before retaliation, with increased federal revenues of $3.8 trillion over a decade.
Trump’s tariffs share this economic warfare ethos, aiming to protect US industries but risking retaliation from Canada, the EU, China and beyond. Like Napoleon, Trump’s policy could weaken the US’s global standing if allies turn away, echoing the “unforced error” that ended Napoleon’s reign.
President Donald Trump’s tariff program, implemented in early 2025, marks a significant shift in US trade policy, with a 10% baseline tariff on all imports and additional reciprocal tariffs on major trading partners like China, the EU, and Canada. These measures, effective from April 5 and April 9, 2025, respectively, aim to address trade deficits and protect American workers. However, their implications extend beyond economics, influencing unemployment, global trade dynamics, industry shutdowns, and perceptions of US universal Imperialism, analyzed here through geopolitical and geo-economic lenses. China imposed a 34% tariff on US goods. Canada and Mexico, already facing 25% tariffs, are preparing countermeasures, potentially targeting US agricultural products. The tariffs pose risks to industries reliant on imports. Consumer electronics, automotive, and retail sectors face higher costs, highlighting impacts on industrial products and technology. Small businesses with slim margins may struggle, potentially leading to closures. The economic ramifications of Trump’s tariffs are multifaceted, with estimates that a 20% universal tariff and a 60% tariff on China could reduce long-run US GDP by 1.3% before retaliation while boosting federal revenues by $3.8 trillion over 2025–2034. This projection, however, assumes no foreign retaliation, which is already occurring, potentially exacerbating economic contraction. Consumer prices are likely to rise, with tariffs on Chinese goods now totaling 54% (combining a 20% existing rate with a new 34% reciprocal tariff. This increase affects a wide range of products, from electronics to apparel, with an additional $329 annual cost per US household. Globally, these tariffs could dampen demand, with noting potential stress on a world economy still recovering from post-pandemic inflation. A Mixed Picture Unemployment effects are contentious, with the current US rate at 4.2% as of March 2025. Industries like steel saw no significant job growth post-2018 tariffs, with employment dropping from 84,000 to 80,000 by 2020, according to BBC News. Conversely, sectors like agriculture faced losses due to Chinese retaliation, partially offset by government aid. The impact on unemployment is complex, with some sectors gaining jobs due to protection and others losing due to higher costs. The current US unemployment rate is 4.2% as of March 2025, but it’s unclear how much is directly tied to tariffs. The tariffs have triggered a trade war, with China imposing a 34% tariff on US goods and the EU considering retaliatory measures. This could lead to shutdowns in industries reliant on imports, such as consumer electronics, as costs rise. Conversely, protected sectors like steel may see growth, but businesses face risks of closure due to reduced competitiveness, especially small firms with slim margins. Trump’s policies might be seen as asserting US economic dominance, influencing global trade to favor American interests. The tariffs have ignited a trade war, with countries retaliating swiftly. This raises debates about “US universal Imperialism,” with geopolitical tensions affecting alliances and prompting countries to seek alternative trade partners, potentially fragmenting global trade.
By comparing Trump’s tariffs to Napoleon Bonaparte’s Continental System, which contributed to economic distress and the fall of his empire, we can explore the economic and geopolitical risks of Trump’s approach and its potential to erode US dominance. These effects echo the economic pain inflicted by Napoleon’s Continental System, which disrupted European trade and sparked unrest, suggesting that Trump’s tariffs could similarly destabilize the US economy if unchecked. The tariffs’ geo-economic ripple effects threaten global stability. The IMF projects 2025 global growth at 3.3%, with a slight downward correction due to trade interruptions. Asian economies, heavily reliant on US demand, face severe impacts, with countries like Cambodia hit by 49% tariffs, per Capital Economics. Canada has imposed 25% tariffs on $155 billion of US goods, and the EU is mulling similar responses, per The New York Times and CNBC. This could slash global GDP growth by up to 1%, potentially stalling at 1% in 2025. Industries like Texas’s semiconductor sector, exporting $20 billion to Mexico, face disruptions, per PBS News, mirroring the trade chaos Napoleon’s policies unleashed in Europe. These global impacts parallel the economic distress Napoleon’s tariffs caused, which devalued Britain’s trade by 25-55% and alienated European partners, setting the stage for broader conflict. Trump’s tariffs jeopardize the US’s “universal imperialism”—its ability to shape global trade rules. EU leaders are planning “appropriate responses,” with Germany’s acting economy minister suggesting Trump might “buckle under pressure” if Europe unites. Canada’s Prime Minister has condemned the tariffs, and Australia’s leader called them “not the act of a friend,” per CNBC. This risks fracturing alliances critical to US influence. Retaliation could splinter global trade, raising prices for goods like iPhones and heightening tensions, per Reuters. This recalls the Smoot-Hawley Tariff Act of 1930, which deepened the Great Depression through global trade collapse. By alienating allies, the US may lose its grip on setting trade norms, much as Napoleon’s economic warfare weakened his empire’s cohesion. Napoleon’s Continental System, launched in 1806 to isolate Britain, backfired by causing economic hardship across Europe. Russia’s 1810 withdrawal prompted his disastrous 1812 invasion, where typhus decimated one-fifth of his troops, per “Napoleon: A Life.” Britain’s coalitions and Europe’s defiance ultimately led to his defeat at Leipzig and collapse. Trump’s tariffs risk a similar unraveling of US influence if trade wars escalate. Designed to cripple Britain, it devalued trade by 25-55% but inflicted widespread distress in Europe, per historical analyses. Russia’s exit in 1810 triggered Napoleon’s failed Russian campaign, compounded by typhus losses. Britain’s coalitions exploited this weakness, fraying his empire. Economic strain and military overreach culminated in his 1813 defeat at Leipzig and eventual downfall. Trump’s tariffs share this economic warfare ethos, aiming to protect US industries but risking retaliation from Canada, the EU, China and beyond. Like Napoleon, Trump’s policy could weaken the US’s global standing if allies turn away, echoing the “unforced error” that ended Napoleon’s reign.