Washington: President Donald Trump’s sweeping new tariff policy has sent shockwaves across the global economy, impacting both advanced economies like India, Canada, the UK, and Japan, as well as developing nations such as Laos and Algeria.
With hefty tariffs set to take effect from August 7, the repercussions are already visible in American markets and international trade corridors. Experts warn that Trump’s move could backfire, hurting not only other economies but also the United States itself. Barry Appleton, co-director at the Centre for International Law, New York Law School, remarked, “There may be no winners in this policy. Most countries will suffer losses, and America is not immune.”
Since reclaiming the presidency, Trump has upended the established global economic system, shifting the power to dictate trade policy from regulatory frameworks to presidential whim. Nations unwilling to accept his terms now face punitive tariffs, while those that comply are squeezed for concessions.
According to Alan Wolff, former US trade official and ex-Deputy Director General at the World Trade Organisation (WTO), Trump’s strategy of forcing countries to the negotiating table through threats has seen notable success. The so-called “Liberation Day” on April 2 marked the start of this aggressive policy, with Trump announcing reciprocal tariffs of up to 50% on trade-deficit countries and a baseline tax of 10% on others.
Trump has invoked a 1977 US law to declare trade deficits a national emergency, granting himself sweeping authority to impose direct import taxes. This move has sidelined the US Congress and is now under judicial scrutiny.
The harshest effects are felt by economically vulnerable nations. Laos, with a per capita income of just $2,100, faces a 40% import tax, while Algeria, with a $5,600 per capita income, is hit by a 30% levy. In stark contrast, America’s per capita income stands at $75,000.
Tariffs have also become a diplomatic tool. Brazil faces a 50% tax, reportedly due to Trump’s displeasure with former President Bolsonaro’s policies, while Canada has been slapped with a 35% levy for signalling recognition of Palestine.
Even countries that conceded to Trump’s terms find little respite. The UK, for example, now pays a 10% tax on goods sold to the US, up from 1.3%. The European Union and Japan have agreed to a 15% tariff— lower than Trump’s original threat, but still steep. Pakistan, South Korea, Vietnam, Indonesia, and the Philippines have also struck deals, but all face higher duties than before.
Domestically, American consumers are bearing the brunt. Everyday items like sneakers, TVs, electronics, bags, and video games—all primarily manufactured abroad—have become significantly more expensive. Yale University experts estimate that the average American household now spends an additional $2,400 annually due to these tariffs.
The average US import tax, just 2.5% in 2018, has soared to 18.3% in 2025—the highest since 1934. “American consumers are the biggest victims of this policy,” says Alan Wolff. “They are now paying extra tax on every purchase.”
As Trump’s tariff regime reshapes global trade, its full economic and diplomatic consequences are only beginning to unfold, both at home and abroad.
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