President Donald Trump’s trade policies, launched under the slogan ‘Making America Great Again’ have instead sparked economic disruption, geopolitical instability, and strategic confusion.  Far from securing America’s economic and national interests, these policies are actively undermining both.

Although Trump’s tariffs are billed as a strategy to rejuvenate domestic manufacturing, correct trade imbalances, and reignite national pride, the real-world outcomes have been far more damaging than beneficial.

Peter Navarro, Trump’s chief trade advisor, stated, ‘All America wants is fairness.’ That may be true, but fairness should begin with facts. According to the most recent Heritage Foundation Global Trade Freedom Index, which assesses how freely nations participate in global commerce, the US ranks a disappointing 69th out of 184 countries: behind Singapore (1st), Australia (3rd), the UK (17th), and Canada (18th). Even Uzbekistan, ranked 24th, outperforms the US.

Navarro further argued that ‘for decades, under the biased rules of the World Trade Organization, the US has faced systematically higher tariffs from its major trading partners and far more punitive non-tariff barriers’. However, the evidence overwhelmingly contradicts this narrative. In truth, the United States itself enforces numerous trade restrictions, both tariff-based and regulatory, and falls far short of being a beacon of open trade.

Pointing fingers at trade partners with stronger trade records, while ignoring domestic fiscal mismanagement, is also both misleading and counterproductive. Hostile actions toward allies like Australia, which runs a trade deficit with the US, only damage relationships without delivering strategic or economic gains.

From an economic standpoint, tariffs are one of the least efficient forms of taxation.  Unlike income or sales taxes, tariffs distort trade flows, increase production costs, and stifle innovation. When applied to critical imports such as steel, aluminium, and semiconductors, these tariffs disrupt supply chains, raise costs in key sectors like automotive and aerospace, and ultimately drive-up consumer prices across the board.

Navarro has also attempted to redefine basic economics, claiming that ‘at the heart of this crisis is a trade deficit in goods that has ballooned to more than $US1 trillion annually’ and that ‘economic models of free trade that predict chronic trade imbalances will always be eliminated through price adjustments via exchange rates are dead wrong’.However, no credible economic models support his claim. In fact, fundamental economics teaches the opposite.

The US trade deficit reflects deeper macroeconomic imbalances, particularly low domestic savings and consistent budget deficits. If America were to reduce its fiscal deficit and increase savings rates, the trade imbalance would begin to resolve naturally, with no scapegoating of foreign partners required. This offers a critical lesson for Australian policymakers as well.

Despite campaign promises to reindustrialise America, protectionism rarely leads to sustainable job creation. America remains home to the world’s second-largest manufacturing sector, and most manufacturing job losses are attributable to automation and productivity improvements and not globalisation. The real challenges facing American workers stem from long-standing policy failures in education, immigration, and social infrastructure, and not trade. Tariffs cannot undo decades of structural economic shifts or policy neglect.

Trump’s tariff-driven strategy has also weakened US leadership on the global stage and threatened international stability.  Historically, America has supported a liberal global trade system that benefited both itself and its allies. Under Trump, even long-standing partners like Japan, South Korea, and Israel have been subjected to punitive tariffs, despite their trade agreements and defence partnerships with the US. Singapore, which imposes zero tariffs on American goods, was even slapped with a 10 percent levy.  That’s not fair trade. That’s economic antagonism.

Geostrategically, the fallout is just as troubling. Trump’s tariffs have been used inconsistently: as threats, negotiating tactics, and supposed long-term policy instruments, projecting a chaotic and incoherent approach. Long-time allies are reevaluating their ties with the US, uncertain about what America now stands for.

While disdain for Europe and Nato within Trump’s cabinet is well known, the collateral damage extends to Indo-Pacific allies as well. Japan and India, key members of the Quad alliance aimed at counterbalancing China, have faced steep tariffs. South Korea, another critical partner, has also been penalised. In response, Japan, South Korea, and China have started coordinating their own trade strategies.

Tariffs carry monetary consequences, too.  In theory, increased tariffs should strengthen a nation’s currency as imports decline and exports rise. But under Trump, the US dollar has actually depreciated against other major currencies; a sign of diminished global confidence in American economic policy. The dollar, once seen as a global safe haven, is now met with hesitation by investors.

The decline of the Australian dollar to below US$0.60 is a stark example of how far-reaching the trade war’s effects have become. Though Australia is a more trade-exposed economy, its currency has suffered more than Singapore’s, highlighting the volatile and unpredictable consequences of US tariffs. While a weaker Australian dollar may boost exports, it also raises costs for consumers and travellers, by increasing prices on imported goods and international services.

Perhaps the most damning critique of Trump’s trade policy is its fundamental incoherence. These tariffs are framed as both temporary and permanent, as tools for negotiation and as ideological imperatives.  They target both rivals and allies, confusing markets and undermining the effort to move supply chains away from China, the very objective the administration once emphasised.

In the end, Trump’s tariff campaign is corroding the economic underpinnings of the United States while diminishing its global stature. Strategic partnerships are being eroded by shortsighted nationalism. Consumers are left to bear higher prices. Allies feel betrayed. And the principles of open, rule-based trade once championed by America are fading into the background.

History and economic theory alike are unambiguous: national greatness is not built through isolationism or erratic taxation. As Ronald Reagan once famously cautioned, ‘The most terrifying words in the English language are: I’m from the government and I’m here to help.’

In this case, the Trump administration came offering economic salvation, only to deliver confusion, instability, and fractured alliances.