As US President Donald Trump doubles down on his push for sweeping tariffs, global markets are rattled and world leaders are on edge. Trump’s aggressive trade agenda—centered on imposing high import taxes on goods from countries like China and members of the European Union—has reignited fears of a global trade war. While his supporters claim the tariffs will revive American manufacturing and protect domestic jobs, economists warn that such policies could backfire, driving up prices, straining global supply chains, and possibly plunging the US economy into a recession.

In this article, we break down what tariffs are, why Trump iTrump’s aggressive trade agenda—centered on imposing high import taxes on goods from countries like China and members of the European Union—has reignited fears of a global trade war. s using them, and how they could spark economic uncertainty both at home and abroad.

What Are Tariffs?

Tariffs are taxes imposed by a government on goods imported from other countries. These taxes are typically added to the cost of the imported product, making it more expensive than domestic alternatives. Governments around the world use tariffs for various strategic reasons, including:

 - Protecting Domestic Industries: By increasing the cost of imported goods, tariffs help local manufacturers remain competitive in the market.

 - Raising Government Revenue: Tariffs serve as a source of income, especially for developing countries.

 - Negotiating Trade Terms: Tariffs can be used as leverage in trade negotiations or to penalize countries engaging in unfair trade practices.

 - Safeguarding National Security: In some cases, tariffs are justified to protect industries crucial to national defense.

When a company imports goods, it pays a duty—essentially a tax—to the government. This cost is usually passed on to the consumer, meaning higher prices for imported items like cars, electronics, or even everyday groceries.

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Why Is Trump Pushing For Heavy Tariffs?

Trump’s tariff policy stems from a core belief that global trade rules have disadvantaged the United States for decades. During his presidency and in recent statements, Trump has insisted that tariffs are necessary to level the playing field, protect American workers, and secure national interests.

According to a White House statement from the Trump administration: “Pernicious economic policies and practices of our trading partners undermine our ability to produce essential goods for the public and the military, threatening national security.”

Trump argues that US companies are paying more than USD 200 billion annually in value-added taxes (VAT) to foreign governments while foreign companies often avoid paying comparable taxes when selling goods in the US. He also points to the enormous cost of counterfeit goods, pirated software, and stolen trade secrets, which is estimated to range between USD 225 billion and USD 600 billion annually.

Of particular concern is the global trade in counterfeit pharmaceuticals, which is believed to be worth USD 4.4 billion and is increasingly linked to the distribution of dangerous, fentanyl-laced drugs.

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Aiming To Reverse Trade Deficit

The US trade deficit, especially in manufactured and agricultural goods, is one of the key motivators behind Trump’s tariff plans. This imbalance, he argues, has:

 - Empowered non-market economies like China.

 - Led to the offshoring of US manufacturing jobs.

 - Damaged small towns and working-class communities across America.

Trump promises a return to a "Made in America" economy, with a focus on reshoring manufacturing, creating better-paying jobs, and promoting national security through domestic production.

Could Trump’s Tariffs Trigger Recession?

While tariffs might sound like a straightforward way to protect American industries, economists warn of serious consequences if they are applied too broadly.

Tariffs increase the cost of imports, and those costs are often passed along the supply chain—from importer to manufacturer to retailer to consumer. If tariffs are imposed across the board, the price of many goods will rise, from raw materials to finished products. That could lead to:

 - Higher inflation

 - Lower consumer spending

 - Disrupted global supply chains

The Ultimate Risk? A Recession

Investment bank Goldman Sachs recently raised its estimate of the probability of a US recession to 45 per cent, citing the increased likelihood of widespread tariffs and the resulting economic uncertainty. “If most tariffs aren't reduced or negotiated away, we expect to change our forecast to a recession,” said Jan Hatzius, the bank’s chief economist.

JPMorgan also echoed these concerns, estimating a 60 per cent chance of both a US and global recession. They predict inflation could rise to 4.4 per cent by year-end, up from its current rate of 2.8 per cent.

The National Bureau of Economic Research (NBER), which officially declares US recessions, defines a recession as a "significant decline in economic activity that is spread across the economy and lasts more than a few months." While the US is not currently in a recession, the economic volatility caused by tariffs—especially if other nations retaliate—could push it in that direction.

Uncertainty Factor

While no one can say for certain that tariffs alone would push the US into a full-blown recession, the fear lies in the uncertainty they create. Businesses, unsure of future costs, may pause investments or hiring. Consumers, seeing prices rise, may cut back on spending.