The return of Donald Trump to the global political stage has been accompanied by renewed trade tensions, particularly in the form of broad and hastily implemented tariff policies. Since reassuming office, Trump has taken aggressive steps to impose import tariffs on nearly every country in the world, with a particular focus on nations with which the United States has a trade deficit. This move has not only created uncertainty for global trading partners but has also brought immense pressure on American businesses, especially in the retail and manufacturing sectors.
Trump’s plan, under the banner of “reciprocal tariffs,” seeks to correct what he calls unfair trade practices by other countries. However, the policy’s execution and reasoning have raised several concerns among economists, diplomats, and industry leaders alike.
In early April, President Trump imposed a blanket 10 per cent tariff on all imports into the United States. On top of this, higher tariffs were announced for countries with pronounced trade surpluses with the U.S. Trump claimed these measures were necessary to protect American jobs and ensure fair trade. However, the announcement came with little prior consultation and no structured negotiations, leading to confusion in international markets.
Realising that many nations might need time to respond or renegotiate, Trump introduced a 90-day pause, during which countries were invited to propose new trade deals with the United States. But with more than 180 countries potentially affected, the feasibility of holding meaningful talks with each of them within such a short window was always doubtful.
As the 90-day clock continues to tick, Trump has shifted gears. Admitting that it is impossible to meet every trade partner in person, he has opted for a different approach. Instead of waiting for each country to request negotiations, the Trump administration has decided to send out official letters through Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. These letters are expected to inform countries about the specific tariffs they will face for doing business with the United States.
Trump made this announcement during a roundtable discussion during his recent visit to the United Arab Emirates, stating that although the U.S. will be “very fair,” there will be no time to engage in talks with everyone. He added that nations could appeal the tariff rates, but the process remains unclear.
The policy has already begun reshaping diplomatic and economic relations. On May 8, the United States signed a trade agreement with the United Kingdom, marking one of the first successful outcomes of the 90-day period. India followed suit by finalising a trade pact of its own.
More notably, on May 12, after extensive weekend negotiations in Geneva, the United States and China reached an interim agreement to reduce tariffs on both sides for 90 days. This deal marked a pause in a long and heated economic standoff between the two largest economies in the world. The deal includes commitments from China to purchase American agricultural products and reduce certain regulatory barriers, while the U.S. agreed to ease restrictions on several categories of Chinese goods.
While these developments have provided some relief, the broader challenge remains. With over 190 countries on the receiving end of Trump’s tariff threat, many are still waiting to hear from Washington. The lack of clarity around the “reciprocal tariffs,” combined with their seemingly arbitrary nature, has sparked concern among global trade experts. They argue that such policies not only risk retaliatory tariffs but also undermine the global trading system that the U.S. helped build after World War II. Countries caught in this uncertainty now face difficult choices: wait for a letter from the Trump administration dictating their trade terms, or proactively seek an agreement without knowing the criteria being used.
Domestically, American businesses are also feeling the effects. Retail giants like Walmart, Target, and Lowe’s are struggling to balance the higher costs from tariffs with the need to keep prices competitive for consumers. Target recently revised its financial outlook for the year, acknowledging the pressure from tariffs but maintaining that it will try to limit price hikes. Similarly, Home Depot has admitted that while it won’t raise prices across the board, individual items might see increases, and some products may even be pulled from shelves due to higher costs. Lowe’s has echoed these sentiments, stating that while they are committed to competing on price, they are also dealing with rising costs from suppliers.
Walmart, the largest retailer in the world, has been more direct. The company warned that prices will rise due to the tariff policies, and some of these increases could begin as early as this month. The Trump administration was quick to respond. Trump criticised Walmart publicly, stating that the company should “eat the tariffs” instead of passing the costs onto customers. Walmart’s CEO, Doug McMillon, responded that while the company has absorbed part of the added costs, it is not possible to take on the full financial burden, given the scale of the tariffs.
Amazon also found itself in the administration’s crosshairs. Reports surfaced that the company was considering displaying the added cost of tariffs on its platform, particularly on its discount marketplace, Amazon Haul. This idea was not well received. The White House labelled the move “political,” prompting Trump to call Amazon founder Jeff Bezos. Following the conversation, Amazon stated that it never intended to show tariff costs to customers. The issue subsided, but it demonstrated the level of scrutiny companies now face when responding to trade policy.
Toymaker Mattel was similarly targeted when it revealed that it would need to raise prices due to tariffs. Trump reacted strongly, threatening a 100 per cent tariff on Mattel products and claiming the company would not sell a single toy in the United States if it proceeded with the price hike. This kind of public pressure has made it increasingly difficult for companies to speak openly about the impact of tariffs. Retailers are caught between the need to remain transparent with shareholders and the risk of drawing unwanted attention from the administration.
Behind these headlines lies a deeper issue. While Trump claims his goal is to protect American jobs and industry, many of the tariffs are being applied in a sweeping and uncoordinated manner. This has created uncertainty for both foreign governments and U.S. companies, making long-term planning difficult. Trade partners are unsure of how the U.S. is calculating its reciprocal tariffs, and American firms are unsure of which products will be targeted next. Some experts argue that rather than bringing about better trade terms, the current policy risks long-term damage to U.S. global competitiveness.
India, which is currently in the midst of trade talks with the U.S., provides an example of how complicated these negotiations can be. A delegation led by Commerce Minister Piyush Goyal is in Washington to finalise the terms of a bilateral trade deal. While there are hopes for progress, Indian officials remain cautious. The arbitrary nature of the reciprocal tariff system, combined with pressure to make quick concessions, has made the process more complex. India is aiming to secure favourable terms while resisting sudden or lopsided demands from Washington.
As the deadline for the 90-day pause approaches, the world waits to see how many countries will receive tariff notices and how many will succeed in striking deals. The Trump administration insists that it is acting in the national interest, seeking better trade deals for American workers. However, the speed and manner in which these tariffs are being implemented have left many questioning whether this approach will achieve the desired results or lead to more global instability.
The global economy is already under pressure from inflation, supply chain issues, and geopolitical tensions. The imposition of broad tariffs without adequate preparation risks making these problems worse. While Trump has managed to extract concessions from some nations, the overall strategy remains fraught with challenges. Countries that do not agree to the terms may retaliate, leading to prolonged trade disputes. Meanwhile, American businesses may continue to pass on costs to consumers, leading to higher prices at a time when household budgets are already stretched.
