Trump Tariffs Make Economists Angry

The implementation of import tariffs imposed by United States President Donald Trump will take effect on Wednesday (9/4/2025). While several countries, including Indonesia, are negotiating the policy with Trump, global economic experts are heavily criticizing him. According to them, the policy plunges the world into a trade war.

"This is a very foolish action," said economist Paul Krugman in New York, USA, on Monday (7/4/2025), local time, or Tuesday (8/4/2025) Indonesian time. Krugman is a Professor of Economics at the City University of New York. He won the Nobel Prize in Economics in 2008. Krugman is renowned for his new trade theory and economic geography theory.

Krugman explained that the U.S. is the inventor of the global supply chain scheme, enabling people around the world to enjoy free trade and purchase products at affordable prices. The system, which was painstakingly built and maintained, is now being destroyed by Trump.

“Trump has done nothing to advance the economy. This is pure bullying to get people to come and worship him,” Krugman said.

This statement refers to Trump's stance of not trusting multilateral trade agreements. When imposing tariffs, Trump wanted each country to approach him individually. Vietnam, for instance, in order to avoid a 46 percent import tariff, ultimately exempted all U.S. products entering the country from tariffs.

For Krugman, Trump's actions have actually tarnished the reputation of the U.S. Although countries eventually try to court Trump, deep down, they perceive the U.S. as untrustworthy. Sooner or later, they will gradually distance themselves from the U.S.

Meanwhile, Professor Kako Nubukpo from the University of Lome in Togo stated that tariffs are the weapon of the weak. "Trump felt disheartened seeing the U.S. trade deficit with China, which is why he unilaterally imposed tariffs," said the Minister of Development of Togo from 2013 to 2015.

Nubukpo explained that the current state of the world is fragile. An increasing number of countries in Africa, Europe, America, and Asia are shifting away from democratic systems. As a result, the people are becoming more oppressed. They are already facing hardships in life and are now burdened with additional pressure from Trump.

"Developing countries will become increasingly impoverished, and globalization risks coming to a halt," he stated. According to him, countries in Africa must prioritize both national and regional interests. This fosters collective resilience amidst an unfavorable economic climate.

Lebanese economist Nasser Saidi also expressed a similar view. The world supply chain is clearly disrupted. Moreover, Trump's tariff calculation is arbitrary because it does not refer to any economic and trade theory. The method is only surplus minus deficit and multiplied by 100 percent.

In the future, African and West Asian countries will move closer to East, South, and Southeast Asia. Indeed, for now there are still difficulties in access, but because of US behavior, regional cooperation will increase.

Back in the US, securities firm Berkshire & Hathaway issued a press release that its chairman, Warren Buffett, did not support Trump's tariffs at all. Previously, a number of Trump-supporting social media accounts had used Buffett's name and said the investor praised the tariffs.

Not only economists, the US Chamber of Commerce and Industry is also angry. According to leaks received by Fortune magazine, the largest lobbying group in the US is planning to sue the Trump administration. The White House is considered to be disrupting trade. They want the tariffs to be canceled on Wednesday (9/4).

In 2020, the US Chamber of Commerce sued the Trump administration. At that time, Trump was president from 2017 to 2021. He imposed anti-immigrant regulations. According to the US Chamber of Commerce, the economy needs skilled immigrants to come and work legally.

The US stock market continues to slide. As of Monday (4/7), the S&P 500 is down 0.2 percent. The Dow Jones is down 0.9 percent and the Nasdaq is down 0.1 percent. There was a brief increase because news circulated on social media that Trump would suspend tariffs for the next 90 days.

However, the White House later said the news was a lie. The stock market fell again. Moreover, Trump said he was thinking of increasing import tariffs on China again because Beijing retaliated by raising tariffs on US commodities by 34 percent.

Last week, the New Civil Liberties Alliance (NCLA) filed a lawsuit. They represent micro, small, and medium enterprises (MSMEs) in the US. These MSMEs import a lot of raw materials, semi-finished goods, and finished goods from China. Trump imposed a total import tariff of 54 percent on China.

"The president has no legal basis to impose unilateral import tariffs. China's claim that it is not stopping fentanyl smuggling is not a legal basis," the NCLA lawsuit said.

Trump invoked the Emergency Economic Powers Act (IEEPA). According to the NCLA lawsuit, nowhere in the IEEPA does the president have unilateral authority to impose tariffs.

People can't expect much from the central bank. Usually, the bank will cut interest rates to protect the economy. However, the US is in a tight spot. Inflation is high and people's purchasing power is low. If interest rates are lowered, inflation could soar.

"Growth is definitely slowing. The concern for all of us right now is that it doesn't become a recession," said JP Morgan CEO Jamie Dimon.

Fears of recession were conveyed by Singaporean Prime Minister Lawrence Wong in a parliamentary session. He said that the era of globalization and the implementation of international law was stopped unilaterally. Everything is uncertain. The US and world economies could fall into recession.

"If other countries use a unilateral approach like the US, global trade will collapse. International law ensures that global trade is fair and benefits all," Wong said in a speech broadcast live by Channel News Asia.

Small countries, even though they are rich, do not have the capacity to negotiate one-on-one with the US. Moreover, Singapore does not have the natural resources or human resources for labor-intensive industries. Singapore's economy depends on international trade.

Singapore was hit with a 10 percent tariff by Trump. In Southeast Asia, Singapore's tariff is the lowest. Vietnam is hit with 46 percent, Cambodia 49 percent, and Indonesia 32 percent. Lesotho is hit with the highest tariff in the world, at 50 percent.

The remote islands of Heard Island and McDonald Island in the Indian Ocean, which are uninhabited, are also subject to tariffs. Both islands are Australian territories and are sanctuaries for penguins and seals. Canberra is baffled that the US is imposing tariffs on the islands.

"This is definitely a mistake on the part of the US. It seems they rushed into the tariffs," Australian Trade Minister Don Farrell told the ABC.

In an interview with CBS, US Trade Secretary Howard Lutnick said that Trump imposed tariffs on Australia and all the islands that are part of its territory. Trump does not want any loopholes that could later cause the US to be cheated.

(AP/AFP)