VIDEO: Trump’s global tariff war disrupts markets and exposes limits of U.S. power – Alan Cafruny
In a video interview with News.Az, renowned American political scientist Alan Cafruny, the Henry Platt Bristol Professor of International Affairs at Hamilton College, analyzed the consequences of Donald Trump’s recently launched global trade offensive, calling it a “comprehensive tariff war” that is already reshaping the international landscape.
“It’s been a little over two weeks since Donald Trump launched a comprehensive tariff war on the world. Much has changed in that time, offering a glimpse into the contours of an emerging global order,” Cafruny noted.
Trump declared “Liberation Day” on April 2nd with great confidence, announcing a 10% across-the-board tariff, along with three reciprocal tariffs that were mainly targeted at goods—rather than services—from countries running trade surpluses with the United States. The administration's central justification was the hope for import-substitution-driven reindustrialization. However, Cafruny emphasized that a hidden factor was also at play: the attempt to create an effective form of taxation to compensate for budgetary losses resulting from massive tax cuts for wealthy Americans.
The global market reaction was immediate and severe. Stock indices plummeted across the world, followed by a massive bond market sell-off, sparking fears of a global financial crisis. Treasury bond prices fell as yields rose, and both U.S. stocks and the dollar took major hits. These developments ultimately forced Trump to announce a 90-day pause on reciprocal tariffs—with the notable exception of China.
“Even in China’s case,” Cafruny observed, “Trump rescinded tariffs on electronics. These steps helped calm global markets—especially in the United States.” According to him, most countries signaled a willingness to negotiate with the U.S., including the European Union, the world’s largest trading bloc, despite its initially defiant rhetoric.
However, Cafruny pointed out that world trade is now in retreat, accompanied by slowing global GDP growth. Most significantly, the U.S.-China confrontation continues to escalate through an exchange of tit-for-tat tariffs. “China is not backing down,” he said. “And this is where the real balance of power comes into focus.”
While it is true that China heavily relies on exports to the U.S., the interdependence is mutual, Cafruny emphasized. Tariffs alone are unlikely to revive U.S. industry, since the decline in manufacturing cannot be blamed solely on China’s rise. In fact, 56% of U.S. imports are components used in domestic production, meaning tariffs are more likely to fuel inflation than trigger reindustrialization.
At the same time, Cafruny highlighted that China dominates the global supply of rare earth minerals, which are essential for high-tech manufacturing. In addition, U.S. agriculture is highly dependent on exports to China. One of the more alarming developments, he noted, is China’s decision to suspend deliveries of Boeing aircraft, threatening an already embattled U.S. aerospace giant.
Meanwhile, Trump’s export controls on Nvidia—intended to limit high-end chip sales to China—have backfired, leading to a sharp drop in Nvidia’s stock and harming a key American tech player.
“In light of all these setbacks,” Cafruny told News.Az, “Trump has begun to hint atconcessions to China. This won’t bring the trade war to an end, but it may slow its pace and mitigate some of the economic damage.”
Ultimately, he concluded, the unfolding events reflect two major geopolitical truths: the rise of multilateralism and the growing limitations of American power in a complex, multipolar world.
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