All wars are fought to win, to achieve the de­sired ob­jec­tive. To be more pre­cise, it means be­ing able to in­flu­ence the post-war sit­u­a­tion, whether through po­lit­i­cal changes or by es­tab­lish­ing a new or­der. Carl Von Clause­witz, a Pruss­ian (Ger­man) gen­er­al and strate­gist, wrote that “war is a con­tin­u­a­tion of pol­i­tics by oth­er means,” mean­ing that war is linked to po­lit­i­cal goals and force (war) is sim­ply an­oth­er way to achieve them.

The US has dom­i­nat­ed the post-World War II era and re-en­gi­neered the world or­der.

It led the move­ment to low­er tar­iffs and non-tar­iff bar­ri­ers, lead­ing to freer trade and a “rules-based or­der” cul­mi­nat­ing in the es­tab­lish­ment of the World Trade Or­ga­ni­za­tion to over­see the world trad­ing sys­tem.

It has re­mained the largest econ­o­my and es­tab­lished the pri­ma­cy of the US dol­lar as the “lin­gua fran­ca” of the fi­nan­cial sys­tem. In the last 80 years, the West­ern “cap­i­tal­ist” sys­tem has pro­lif­er­at­ed as the So­vi­et Union and its east­ern al­lies (COME­CON) dis­solved.

The US lead­er­ship im­proved the world’s trade sys­tem. The world econ­o­my grew as trade grew and pover­ty re­ced­ed.

Sta­tis­tics are use­ful but do not al­ways tell the whole sto­ry. The World Bank Sta­tista 2025 pro­vides im­por­tant da­ta to clar­i­fy the changes. Trade, as a per­cent­age of world GDP, grew from 25 per cent in 1970 to 63 per cent in 2022 but fell to 59 per cent in 2023.

The US econ­o­my grew larg­er than the rest of the world. Im­ports in­to the US grew from 10.56 per cent of the GDP in 1990 to 15.6 per cent in 2022. Con­verse­ly, US ex­ports as a per­cent­age of GDP grew from 9.25 per cent in 1990 to 11 per cent in 2023. Whilst the per­cent­ages sound small, the val­ues are large, as the nom­i­nal US GDP is ap­prox­i­mate­ly $30 tril­lion com­pared to the $115 tril­lion for the world.

Sim­i­lar­ly, US man­u­fac­tur­ing sounds small at 12 per cent of its GDP com­pared to Chi­na’s 29 per cent. How­ev­er, the US is sec­ond on­ly to Chi­na, and its man­u­fac­tur­ing sec­tor is larg­er than the com­bined val­ue of man­u­fac­tur­ing in Ger­many and Japan.

The US al­so has the largest mar­ket in the world, and the emer­gence of the Wash­ing­ton Con­sen­sus (trade lib­er­al­i­sa­tion, fis­cal dis­ci­pline, dereg­u­la­tion, de­mo­c­ra­t­ic lib­er­al­ism) made the US a tar­get mar­ket.

Since the rest of the world was pre­pared to ac­cept US dol­lars as pay­ment, the US im­port­ed more vis­i­ble goods than it ex­port­ed. Hence, the US$1.2 tril­lion vis­i­ble goods deficit in 2024 com­pared to its $300 bil­lion sur­plus in in­vis­i­ble ex­ports (ser­vices).

The al­most unan­i­mous view of most eco­nom­ic com­men­ta­tors is that the tar­iffs are based on weak eco­nom­ic log­ic and poor math­e­mat­ics. They ar­gue that the tar­iffs are an act of self-harm that will desta­bilise sup­ply chains, stoke in­fla­tion and en­cour­age more coun­tries to form al­liances that ex­clude the US.

Since in­fla­tion re­duces dis­pos­able in­come and con­sumer spend­ing pow­er, it would re­duce de­mand and slow world eco­nom­ic growth, not mere­ly the US econ­o­my.

Glob­al­i­sa­tion has in­creased fi­nan­cial mar­ket in­ter­con­nect­ed­ness and the risk of mul­ti­ple mar­ket ef­fects. Lest we for­get, the 2008 US hous­ing mar­ket bub­ble caused a fi­nan­cial cri­sis in many West­ern economies.

Fi­nan­cial mar­kets re­act­ed neg­a­tive­ly to the tar­iffs. In­vestor con­fi­dence, as mea­sured by stock mar­ket move­ments, has re­spond­ed neg­a­tive­ly to the un­cer­tain­ty caused by the yet un­known con­se­quences of the sweep­ing na­ture of the tar­iffs. The volatil­i­ty met­rics sug­gest that the stock mar­kets are in un­cer­tain ter­ri­to­ry.

While stock mar­kets give an in­di­ca­tion of an econ­o­my’s health, they are im­por­tant to un­der­stand­ing the pre­vail­ing sen­ti­ment. In fi­nan­cial mar­kets, bond prices weak­ened, and yields went up, mean­ing that bor­row­ing could be­come more ex­pen­sive. The dol­lar weak­ened, de­pre­ci­at­ing against the yen and the eu­ro. Ex­perts ex­pect this to con­tin­ue.

Trump’s tar­iffs are meant to re­duce im­ports from every coun­try in a trade sur­plus with the US. They are blunt force tools to force friend and foe alike “to bend the knee” and ne­go­ti­ate us­ing US mar­ket ac­cess as lever­age.

Viewed from this light, Pres­i­dent Don­ald Trump’s tar­iff pol­i­cy is an­oth­er way to ce­ment the US as a world pow­er and de­stroy the “rules-based trad­ing sys­tem” it built. There was no mis­tak­ing this in­tent when Trump bragged at a din­ner for Re­pub­li­cans on April 8, Lib­er­a­tion Day’eve, that coun­tries were “kiss­ing my a..” plead­ing to ne­go­ti­ate tar­iffs and to do deals (see Reuters, CNN, CN­BC et al.)

The 90-day tar­iff im­ple­men­ta­tion pause ex­cludes the tar­iffs in­tro­duced on the US’s largest trad­ing part­ners, Cana­da, Mex­i­co and Chi­na. Chi­na is the US’s main ri­val for hege­mon­ic in­flu­ence, which ex­plains why it has at­tract­ed the high­est tar­iff rates.

When Chi­na re­tal­i­at­ed with tar­iffs on US-pro­duced goods, Trump in­creased the tar­iff on Chi­na’s ex­ports to 145 per cent to en­sure that Chi­na, and by ex­ten­sion, the world, got the mes­sage. Chi­na will not be co­erced.

The un­in­tend­ed mes­sage is that the US is an un­re­li­able part­ner. Re­order­ing and re­ar­rang­ing part­ner­ships will take time. But there should be no mis­tak­ing Trump’s in­tent.

His strat­e­gy will have mul­ti­ple im­pacts on T&T: trade and in­ter­na­tion­al re­la­tions, for­eign ex­change re­serves, the Her­itage and Sta­bil­i­sa­tion Fund, so­cial se­cu­ri­ty and pen­sion funds, in­fla­tion, and the coun­try’s eco­nom­ic per­for­mance.

This is an op­por­tu­ni­ty and an im­por­tant lead­er­ship mo­ment. On April 28, cit­i­zens must choose a lev­el-head­ed po­lit­i­cal leader with the vi­sion and the skills nec­es­sary to ad­dress the chal­lenges and achieve so­cial con­sen­sus.

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness.