Panel: How will Trump's tariffs reshape the US and global economies?
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Hello and welcome to World Today, I'm Zhao Ying. U.S. President Donald Trump has announced sweeping new tariffs against trade partners. The plan says a baseline tariff of 10% on all imports with significantly higher rate in some cases, 34% for China, 20% for the EU, 24% for Japan and 46% for Vietnam.

The tariffs will apply to about 60 countries, marking the biggest shakeup of global trade norms since World War II.

Trump said the move is in response to what he called unfair trade practices like tariffs and other trade barriers. He declared a national economic emergency to justify the new tariffs. He argued that punitive steps could bring industry and jobs back to the United States. Treasury Secretary Scott Benson warned other countries not to hit back. However, several nations have said they would retaliate.

Can these tariffs really deliver the economic boost Trump promises? Or will they end up hurting American businesses and consumers? Could this lead to a global trade war? And could this mark a turning point in the U.S. role in the global economy?

For these questions and more, we are joined by Dr. Zhou Mi, Senior Research Fellow with Chinese Academy of International Trade and Economic Cooperation, Dr. Li Pei-mei, Assistant Professor of Political Science at the International Islamic University in Malaysia, and Dr. Joseph Gregory Mahoney, Professor of Politics and International Relations at East China Normal University. Professor Mahoney, let me start with you. Trump caused this

Liberation Day. What do you think he means by that and who exactly is being liberated? You know, it's a very powerful. It's a very powerful word You know this this image that he has painted of the United States being raped and pillaged by other countries that For decades the US has been subject to unfair trade relations that the US is some somehow been victimized by

by the globalization system that it put in place and that for years it has dominated to its own benefit is certainly something that's quite stunning. And nevertheless, this is the point that he wants to make, that this international order has been transformed, that we're living in this new era, one in which the United States will do business in a very different way.

One that I think is certainly, at least as he envisions, post the old period of multilateral trade relationships and instead moving into a position where the United States will maximize whatever leverage it has to try to

bring itself back to the fore. Now, that's one side, but there's another narrative. And I was talking to my brother this morning. I was reading a lot of other people writing on the left and the right and the center in the United States. And there's this broad perception that the United States was failing, that it was in a period of absolute decline. And

and that the Biden administration had tried what many view to be the old method of building alliances and trying to put together some sort of effective strategy for making sure the US could sustain its position internationally. We saw this, of course, with Biden's proxy war in Ukraine, which by all accounts, except those published in the West, has failed.

And we saw the continued rise of China and the failure of the Biden doctrine to effectively contain China. So what we see here is a radically different approach now being employed by Trump. I think it's a bit of a desperation ploy. It's very high risk.

But it's definitely trying to make the most of whatever remaining leverage the U.S. has in terms of the power of its military, in terms of the power of the dollar, in terms of its control over the SWIFT system and the global financial system to try to shore up its position globally, while at the same time, Trump is undertaking this radical transformation of the federal government in hopes of affecting some sort of

reforms that might also run hand in hand with some sort of salvation of the United States at this very difficult period. Okay. Well, Dr. Lee, as Dr. Mahoney put it, Donald Trump described the U.S. as

a victim of this global trade system and he argues that these tariffs are necessary to stop the u.s from being pillaged by other countries are these claims justified

Well, I do agree that this is, with what Professor Mahoney said, this is actually an attempt by the United States to stop being in absolute decline. And this characterisation is actually untrue because, as just now Professor Mahoney has mentioned, I mean, after World War II, the US was the one who was championing free trade. And they have been actually using various means to ensure that countries would embrace free trade.

And they have been fiercely pushing for these free market policies through institutions like World Trade Organization, IMF, World Bank. And now the U.S. is disregarding the role played by these institutions to safeguard all these free market policies. And basically, in the past, when the U.S. was championing for free trade policies, it's trying to convince the world, specifically the developing countries, that if you want to get

economic growth, if you want to get prosperity, the only way is for you to open up the market. And therefore, many countries actually believe the United States and they've begun to open up the economy. So China, I think, is one of them that has embraced this, the reform and opening up policies in the late 1970s. And indeed, we see that China has grew rapidly and its growth is one of the fastest in the modern history.

So to a certain extent, I do think that free trade does promise some prosperity. But currently, when Trump administration, they looks at US trade balance, they saw that the US actually suffers from trade deficits. And for Trump, it basically means that the US industries have become less competitive and their free trade policies have been taken advantage of by other countries. But what I want to say that actually this is not the whole truth.

the US industries actually remain very competitive. The reason why US ran trade deficits with many countries is the reason because the US firms actually took advantage of the free trade by internationalizing its supply chain. So for example, Apple is an American brand, but its production has been outsourced to firms in China and Vietnam. So therefore,

when China has finished Apple products, they will definitely be exported back to America. And that actually will be counted by the Trump administration as a trade deficit. But in actual reality, that's not. So another thing we have to bear in mind is that the production cost in America is actually much higher than in other countries. So for products that are labor-intensive, such as clothing,

It's virtually impossible to be produced in the U.S. because the cost would outweigh the profits. So I think that is not a fair characterization of the global trade dynamics that the U.S. has been exploited by other countries.

Okay, well, Dr. Jomi, let me get your thought on this, because Trump justified these tariffs as reciprocal, and they're targeting nations with high trade imbalances or barriers like value-added tax. I mean, is this a fair characterization of global trade dynamics, or does it oversimplify this complexity of modern economic interdependence?

well we know that it is always the sum of ideas of donald trump when he was in the first term they believe that the deficit is a bad thing for the united states and the reason for that is not that u.s is not working so hard it's because in other countries

are doing some kind of unfair practices. So I don't think that is just based on the arithmetic or some of the calculation about the import and export. It's a very long history of development and it is the natural result of the international collaborations and also the transfer of industries among the different regions. So we believe that when we are talking about the trend that is always happening when

Some countries are emerging from certain places and they are trying to pick up their positions and trying to use more resources to improve the position in the global value chain. Like the United States has played an important role in the 1960s and 70s, a lot of industries have been moving from the United States to other countries, including Japan, including Southeast Asia, and also to China.

But they also benefited from the improvement of the trade-in services and the effort allowed in that thing. And they have a lot of intellectual properties. So the unfairness is just a concept. It's just a right to use the word of that thing to pretend that you're not a victim. But I don't think these are...

are really a victim is benefited from the update and growing up in the global value chain and even have a better position in controlling the global supply chains and have more benefits and profits from that.

Okay, well, Dr. Mahoney, Trump has invoked the International Emergency Economic Powers Act to justify these tariffs. Is this a legitimate use of emergency powers or do you feel it's an overreach that could set a dangerous precedent?

Well, we've already seen Congress, the Senate responding to this and trying to put forward legislation that would limit this power. It has no chance of passing because it won't be brought to a vote in the House. Certainly, they wouldn't have enough votes to override a presidential veto.

In media that I was doing yesterday, I characterized this, and I think rather fairly, that Trump basically just declared economic warfare on the entire world. And he did so in a very spurious way. And I would agree with my colleague, Li Pei Mei, who said that, you know, this isn't really about tariffs or reciprocal tariffs. This is about trade surpluses.

And here there are sort of two issues. One is, you know, some surpluses are good. If you're a rich country and the United States has been a rich country in some respects, it's good to buy more than you sell. At the same time, though, it is clear that the U.S. is facing a very difficult situation. Since the 1980s, the data shows the middle class has been hollowed out.

American workers increasingly have to compete with international workers. It's true, as was noted, that a large reason that American jobs went overseas was because American corporations took them overseas. But at the same time, the United States failed to invest

in infrastructure. It failed to move forward in certain new technologies like green development, EVs and so forth and so on. And at the same time, it faced a number of crises, many of them of their own doing. For example, the global financial crisis in 2008, its catastrophic response to the

pandemic in 2020. And a lot of the problems that we see now in the U.S., we can trace back to these crises that have been popping up in a cyclical way. A lot of economists point to 2008 in particular as a moment in which middle class, working class people really began to create this

critical mass that someone like Trump could exploit later as a populist. And then, you know, we see all the other issues, drug addiction, people not having access to health care, medical insurance, people self-medicating, going through the opioid crisis and now on to the fentanyl crisis, which, of course, relates in part to some of the accusations that Washington has directed against China and tied to tariffs.

So, in fact, the U.S. has been struggling. And on the one hand, I would think it's almost fair to say that the U.S. is in an emergency situation. We saw, for example,

the US being able to externalize some of the financial costs associated with the global financial crisis in 2008 with the Federal Reserve simply imagining a trillion dollars into existence the night that the market collapsed. And we saw in 2020 and 2021, the US

increase the money supply by 20% in order to paper over the failures associated with the pandemic. And this externalized cost onto the rest of the world. And this is where we see the rest of the world really starting to think, okay, we need to find, maybe it's not yet time for de-dollarization, but we really need to be looking down the road to better forms of financial and strategic autonomy.

And so this is what I think the Trump administration realizes, is that the only thing that's really holding the U.S. economy together is the fact that the U.S. is the largest producer of oil and the close relationship between oil and the dollar and the ability of the U.S. dollar to impose economic power.

around the world. So it is sort of an emergency situation. This is sort of a, perhaps a last chance for the U.S. to try to leverage the power that it has to try to force others to heal while it tries to reform itself. But I

I think it's a great tragedy in so much as at the same time that he's waging this global economic warfare, he's also abdicating any responsibility for climate change, global public health, or aid to the most needy countries in the world. So we're really in this point where we can see a number of intersecting crises and the return of or the increased risk of black swan events.

Okay, but do you feel it's also a kind of overreach of this executive power that might set a very dangerous precedent?

You know, I tried to talk around that issue in two ways. I think you can look at it from both perspectives. And certainly people in the Senate believe that it is an overreach. People in the House don't believe it's an overreach. I think it's a tragic overreach in so much as it's going to create more problems than it solves. But at the same time, I'm sympathetic to the fact that the U.S. understands that it is facing problems.

an emergent situation. Okay. Well, Dr. Li, Trump claims these tariffs will boost the economy by $728 billion and add 2.8 million jobs. I mean, how did it come to those numbers? And are there industries that can actually benefit from these tariffs? Well, to be honest, I hold certain reservations about the numbers.

I assume that the projections are based on the expectations that many firms would then relocate to the U.S. to bypass the tariffs. So then by that projections, there will be millions of jobs that could be added to the U.S.,

But realistically speaking, I think for businesses, it's a major investment decision to actually relocate from one place to another. There is a lot to consider. For example, like what I've said, the cost of production. So relatively, the cost of production in the U.S. is relatively higher because of the wages. And whether they have the talents, they're able to do these jobs or not, because manufacturing sectors have been declining in the U.S., so

do they have the skilled workers necessary to undertake all the manufacturing jobs? And then there will be some laws and regulations and all these considerations will actually take time. So for businesses, they might also think about this another possibility. What if when the Trump term ends, the tariff will no longer be in place? So we have to take also into consideration that this is the second opportunity

Trump presidency and it's more likely to be the last although he's toying with the idea that he might be you know sitting for a third term but I've read some you know analyses and they say that basically

zero possibility. That's like the possibilities like zero for him to be elected for the third term because of the constitution. So for and again, for very labor intensive productions that cannot go to the US because the US their workers wages are very high. So how can they actually make profits out of it if they were to relocate to the United States?

So for me, I think what are some of the industry that can actually benefit from this tariff?

Probably you can say U.S. steel makers, they can benefit from the tariff. But again, there are countries such as Canada, they are also imposing reciprocal tariffs on U.S. steel products. So in the end, what I'm seeing is maybe U.S. steel companies, they are likely to capture bigger domestic market share. Yeah, because of how the U.S. has raised tariff on steel.

steel and aluminium from outside. But then it will be very difficult for US steelmakers to actually expand their market beyond the country because they are reciprocal tariffs, for example, from Canada. So that ultimately it would mean that the expansion will be also limited.

The same goes to this automobile industry. So the United States thinking that if they impose a tariff on automobile coming into the United States, it's going to benefit American automobile industry. But if you look at how

how the American automobile manufacturers, they are also importing spare parts from outside. So in the end, the tariffs on these imported goods will also raise the price of the American manufactured cars. So it is

it would not necessarily make American automobile industry more competitive in that sense. Okay. Well, Dr. Mahoney, in your opinion, do you think these tariffs can help achieve what

the Trump administration intended to achieve because the White House has obviously framed these tariffs as a means to boost domestic manufacturing and protect American workers. But, like, if we take the 25% auto tariff, for instance, could it also lead to a slowdown in the auto industry and hurt U.S. workers rather than help them? You know, I think we will see some industries benefiting, but we will also see...

increased costs, we'll see. There's some estimates that it may take a year before all of the costs really start to hit U.S. consumers. And it may be the case that that's enough time for Trump to work out some deals or exemptions wherever the pain is the most acute. But we saw a

We saw right before the so-called Liberation Day - that I think it was Hyundai who was looking to open - a number of manufacturing plants in the United States.

And, you know, the Trump administration seized on this as proof that this type of policy was bringing jobs back to the United States and would continue to do so. And what they neglected to understand was that Hyundai, you know, as a chaebol with a close relationship to the Korean government, was doing that in order to try to dissuade the Trump administration from applying tariffs.

to Korea. And of course that didn't work. So I don't think we're going to see a lot of firms, not just American firms, that are going to invest in the United States. And let's, even in fields that are the most sensitive and the most directly connected to US strategic interests, we saw, for example,

I think it was TSMC that had been induced to build a factory, I think, in Arizona with the CHIPS legislation and all the tech blockade containment strategies that were put in place against

And one of the problems that they found, and this speaks to the broader issue, is that the company really struggled to get up and running in the state that it had invested in.

And again, this is another issue is that you've got 50 different states and all of them have different policies, different laws. You have some companies that abandon California and go to other states. You have different labor laws. You have different

union laws, you have different environmental legislation. And so it's very difficult for, I think, international firms to come in and find how they're going to be able to build and work. So it's, and at the same time, we've had this tremendous degradation of American infrastructure over the past 20 to 30 years.

Where are these firms going to go? Where are they going to – how are they going to be able to build their own supply chains and then get their markets outside of the United States? And in the meantime, the working class is going to be put in a deeper hole.

uh so your your consumers your that market is going to be uh further degraded i don't think that trump has enough time um to to actualize

his dreams here in terms of being able to, because it does take a lot of time to rebuild that manufacturing base, to rebuild the infrastructure, to make sure you have all of the policy support at the federal level, at the local level, and at the same time, largely abandoning things like environmental regulations and to hell with climate change, because all we're really concerned about is rebuilding a manufacturing base. When one of the benefits of

of exporting all of this manufacturing overseas over the last 20 to 30 years was that the United States was able to export its pollution costs to other countries. So I do think that it's unlikely that this will produce the desired results.

Well, thank you for talking to Dr. Joseph Gregory Mahoney, professor of politics and international relations at East China Normal University. Dr. Zhou Mi, senior research fellow with Chinese Academy of International Trade and Economic Cooperation. Dr. Li Pei Mei, assistant professor of political science at the International Islamic University in Malaysia. Let's take a short break here. Coming back, we'll continue our discussion. Please stay tuned.

Welcome back. You're listening to World Today. I'm Zhao Ying, joined by Dr. Zhou Mi, Senior Research Fellow with Chinese Academy of International Trade and Economic Cooperation. Dr. Li Peimei, Assistant Professor of Political Science at the International Islamic University Malaysia.

Dr. Joseph Gregory Mahoney, professor of politics and international relations at East China Normal University. Dr. Jomi, as we know, the U.S. manufacturing sector has been declining for decades. So can tariffs alone bring back those lost manufacturing jobs or...

Are there some deeper structural changes that are needed? Well, we know that for the traditional manufacturing in the United States, like the steel and aluminum textiles or some of the machineries are based on certain kind of factors. The first one is that they do have enough scale of the economy. I mean, they do have the demand. Well, it is true that the United States has a large economy.

demand on those products. They imported a lot from other countries, from Canada, from Mexico, or even from European unions. But the second factor is that can they have enough abilities for handling this industry, the different kinds of inputs, the laborers, the land, the skills, the technology, and also the capital? Maybe they have some of them, but they do not possess all of them.

Like we know that in the final situation that the unemployment of United States in the manufacturing has dropped to the historically low levels. It means that there are not enough laborers who are able and want to join the manufacturing for the further expansion. Donald Trump is still trying to drive the so-called illegal immigrants out of, from United States. So they are pushing more strength on the supply of the laborers. And that's,

the third factor is about the supply chains i don't think that united have that to

kind of supply chains to support the traditional manufacturing. Like they do not have enough companies who are doing the parts of the automobiles, auto parts, and also some of the parts of the machinery. The companies who are able to process raw materials like the ores are not enough in the United States. So actually for these supply chains,

even more important, even in the Biden administration, they put a lot of effort to strengthen the resilience of the global supply chain. So without those support factors, I don't think that investors will risk their investment in putting in such an uncertain future in the United States. Well, Dr. Li, while Trump is trying to boost manufacturing, the rising import costs may also lead to inflation in the U.S.,

So will Americans, especially working class Americans, be willing to pay more for their everyday goods? Well, I'm going to insist on a very unconventional view. In my view, I don't think Trump actually wants a terrorist war with the world. In fact, I'm actually calling that his

He's actually playing a tariff game. So just like what Prof Mahoney has mentioned just now, Trump is basically trying to maybe work out a deal before it would actually hit the American economy. I think what his administration is betting on is that most countries, if not all, will seek to negotiate for the reduction of tariffs instead of imposing retaliatory tariffs.

So, his administration is basically using tariffs as a bargaining tool. And I believe that, you know, through negotiations, if countries seek negotiations, that tariffs could be eventually reduced. But that is if other countries are willing to give to the US what they actually wanted. If such scenarios do happen, then it will not actually greatly affect the prices.

However, like just now what my other colleagues have said, we're already seeing some countries begin imposing retaliatory tariffs on U.S. goods, which of course could raise the price of the goods in the long run. So from the perspective of the American consumers, I do not think that they will be willing to pay the inflated price of the goods.

Though Trump already said that he's going to promise bigger tax cuts, but the savings from tax cuts may not be enough to offset the increased cost of goods due to inflation. So another thing we have to bear in mind that there will be a midterm election coming up next year. So Trump...

What might be very concerned is the inflation and the increase of the price of the goods might actually affect the midterm elections result. So what I believe is that the Trump administration might want to book up a deal with other countries to reduce the tariff, but in exchange for something that they want in return.

Okay. Well, Dr. Jomi, the Congressional Budget Office estimates that tariffs will generate $2.2 trillion in revenue by 2034. But, I mean, is this just a hidden tax on American consumers and businesses? And how would you assess this tradeoff between this revenue gain and the anticipated rise in consumer prices for goods such as clothing, toys, and automobiles?

First of all, I don't think that we can reach that kind of increase on the tariffs collected from the customers. Because we know that even for the input, they calculate it based on the nowadays trade balance. But I don't think that they will stay there. After several rounds of the tariffs and the retaliation, I think that the demand and supply balance will be changed.

And it was unlikely to just continue with such a kind of increase in the short term. And second, I would say that, as you mentioned about the trade-off, the consumers definitely will suffer from the higher price of buying more things and the inflations.

They will have to find more, you know pressures when they are trying to pick up something because that the source place will be quite changeable because the The companies who are going to import the things we are trying to find the alternative scene important from so there will be a lot of fun creation about the qualities about the standards and about the Also the the things that you report from different countries and that is definitely not good for the consumers to have a sustainable, you know

you know, uh, purchase power. My understanding, I, I would say that it will also change the attitude of many of the people who have, who have voted for him and who believe that it will bring them better life. And, uh, for the perception is just the one part because I waste a lot of, uh, you know, the cost, the more cost in the international supply, the companies, even in the United States will suffer from the shortage of enough supplies. So, uh,

I mean, the employment are not in a very good side, even with more tariff protection. And that will also reduce the income of the consumers and that will have even worse impact on their conditions of making a living.

So I would say that is not only just about the national level and the individual levels relation. It is about how could people foresee the future where there'll be so many fluctuations as we can find the price of the gold. And also the stock market has shown us some of this worries from the people. And I believe that is also a not so good thing for the investors. They may feel it's unlikely

to have a predictable investment environment, business environment. So they may think it's over whether they should just take some time to first start by expanding their businesses in other countries instead of in the United States. Well, Dr. Mahoney, let's look at the global impact. How are the Trump's tariffs expected to affect global supply chains? And what does it mean for global inflation trends?

Well, I think there are a couple of issues here. First, we see a number of US companies, companies like GM, Boeing and others that are very heavily dependent on supply chains that originate or run through China, Japan and other countries getting hammered by these tariffs. So this is going to put a tremendous cost increase on these firms and

that will certainly have an impact on their bottom line. We've already seen some consequences in the stock market. Additionally, a number of people have observed that Trump also hit Vietnam and a number of other countries rather hard. Now, there's been some talk that

On the one hand, a lot of the supply chains that start in China, they downstream, they run through Vietnam. This is just the way they were built for good economic sense. But there's also been some talk that a number of Chinese products had been rerouted through Vietnam.

that Chinese companies were doing this as a way to get around the tariffs put in place during Trump's first term in office. And what we see now, of course, is that that's no longer going to be an outlet for companies that have been doing that or that may have been doing that. So it's going to create a lot of

additional costs. And although we see the tariff being imposed on China, the new tariff being imposed on China as having already a significant impact, we will see, I think, also that there are other impacts in so much as

how China has really integrated well increasingly with other Asian economies, and especially Southeast Asian economies through RCEP, but also coordinating with ASEAN and others, that it's going to have a major impact on how the United States is able to source products, access supply chains.

And certainly, you know, it will have a negative impact here in Asia and elsewhere around the world. But at the same time, I think it will

encourage this region to press forward with even greater integration as opposed to splintering. Although I think that's precisely what Trump is hoping to do is to, you know, in so much as we've seen Trump trying to splinter the EU going back even during his first term when he supported Brexit and then all the pressure and stress that he's been bringing

to Europe and since he took office supporting right wing politics in various forms and even accusing Europe or the EU of being a conspiracy against US interest. I think that we'll see the continued trend in Asia of greater

economic integration, including digital integration. And so these, in fact, we may see these supply chains becoming even more robust and the pressure for the United States to have freer access to them becoming overwhelming for Washington.

Okay, well, Dr. Li, the move actually has been compared to the Smoot-Hawley terror effect of 1930, which many economic historians believe worsened the Great Depression. I mean, is that a fair comparison, you think?

Well, before I answer this question, can I just go back to add some points regarding how Trump's tariff is going to affect global supply chain? Just a very minor point. But what I'm seeing is that actually the U.S. global tariff plans might actually force countries to delink from the U.S. economy.

So this delinking strategy was basically the device strategy by the US to deal with China. But now it's interesting how countries are forced to resort to this to deal with the US. Just like what Professor Mahoney has said, that it will push greater integration in other parts of the region and

For example, in the Southeast Asia region, we're talking more about how we have to enhance intra-ASEAN trade between the members and how we have to also seek alternative markets, for example, in the Gulf countries. So I think this is very interesting on how this Trump tariff is going to affect the global supply chain.

Going back to the questions about the Smooth Haley Tariff Act and its comparison with Trump's move, I think destructive impact would be comparable because both the Smooth Haley Tariff Act and also Trump's global tariff plan is actually going to cause destruction in global trade. But there are also some differences.

First, it would be that the Smooth Haley Tariff Act was meant to protect American interests at the onset of the Great Depression, meaning that there are indeed some unusual circumstances that require the U.S. to take certain measures to protect its economy. But today, if you look at the move by Trump, it's actually unjustifiable because when

we're not in any Great Depressions or economic recessions. So there is actually no unusual threat from other countries for him to invoke emergency power. And Trump's global tariff plan is driven by executive order, whereas Smooth Haley Tariff Act is actually passed by the Congress. So there are also different in the sense that Trump's move may not be fully agreed and supported by the Congress members. And

Moreover, if you look at the Smooth Haley Tariff Act, it imposed tariffs on over 20,000 imported goods. So it does not target specific countries like what the Trump administration is actually doing. If you look at Trump administration, they're basically imposing different tariff rates on countries, like Malaysia is slapped with 24% tariff, while Singapore is being imposed 10%. So I do agree with what Professor Mohoney said that

You know, Trump's tariff plan is trying to divide countries. And basically for us in this region, Southeast Asia region, we are very concerned that, you know, ASEAN, which is a regional organization, the members itself will be very divided over how to deal with Trump's tariff.

But today, I would say that the world is in a better position as Trump's tariff plan unfolded, because we're not in a Great Depression. So, in fact, we have more room to navigate the disruption caused by Trump's tariff plan. And what Professor Mahoney said, I think is right in the sense that probably we're going to get a more robust global supply chain out of this tariff plan by Trump administration.

Okay. Well, Dr. Jomi, what do you make of the impact of Trump's tariffs on global economy? Yeah, first of all, I think that many countries will have some kind of ideas about this practice because it's one of the first times in the multilateral system after WTO was established in the year of 1995. So many of these WTO members believe that the MSN tariffs would be the way that we are putting tariffs on other members.

So it's unnatural and I think it's very strange for one important economy of WTO to not abide by these rules.

So the multilateral systems are having some impact. And I think that many other members will think about whether we should try to think of the possibilities for the future of these multilateral systems. And second, I would agree with the experts that there will be a lot of changes on the global supply chain.

The supply chains are decided by the cost and also the efficiency. And another important fact is about the steadiness and also the predictability. So for the supply chain, I believe that with additional tariffs, the suppliers will think about the possible solutions and alternatives.

and all the member countries will try to not only be involved directly in the negotiation with the United States, but also trying to give some instructions and suggestions to the companies. I think that will also leave some time for the global supply chains to be rebalanced. And third is also some of the worries. We know that the security has become one of the important issues in the previous years.

But now the security seems to be even more important. How can one country protect its national security? How can they protect the people and the stakeholders, especially small and medium-sized enterprises? As we can find, there are not only the reciprocal tariffs, there are also a lot of new practices like to reduce the more valued products, tariff rate policies by the United States.

So this kind of policies will change the scenarios of international supply chains. And I mean, there will be a lot of more reactions according to that. And for other countries, it is also a possible way of discussing some kind of new mechanism without an institution of the United States.

Okay, well, Dr. Mahoney, the Treasury Secretary Scott Benson has warned countries not to retaliate. But I mean, is that a realistic expectation? And how resilient is the US economy in absorbing the cumulative impact of the responses if countries do decide to retaliate? Well, I think on the one hand,

You know, we have seen a number of countries talking tough, even Canada, which did not see, I think, new tariffs announced. They already have others in place, started by Trump shortly after he took office.

I think that what we're seeing, for example, from countries like China is a measured response. On the one hand, I think we can anticipate reciprocal tariffs. But at the same time, I think there's a desire to avoid tariffs.

being too reactionary. In other words, you don't want someone in Washington beating the drum and then you dancing in step. Rather, it's better to step back, take a look at how this is

unfolding. We see news that Beijing will coordinate responses with Seoul and Tokyo. This is an incredible, I think, breakthrough when we consider just in the past couple of years the extent to which

Washington was pressuring South Korea and Japan in its containment strategy against China to see these three countries now cooperating. I think we'll have to see exactly what that means, but the prospect of that sort of cooperation is a profound change or shift in relations. I think we will ultimately see some reciprocations

And then we'll see the US reciprocating in turn. I think there will be some attempts to negotiate

We'll see countries, and China of course has been in the lead doing this for many years, seeking new markets in the global south, trying to develop those, China doing this in part with its extensive effort to improve bilateral trade ties, but also through other efforts.

that have been facilitated in part by the Belt Road Initiative. So we'll see, I think, this continued effort. And let's go back to RCEP. You know, RCEP was something that was coming, and the Obama administration tried to create a counter with the Trans-Pacific Partnership, and then Trump blew that up because he's against trade alliances.

or trade blocks. But, you know, I think that we will continue to see RCEP develop in ways that allow these markets in Asia to grow together, to de-risk themselves from the United States. Another thing that I think that is really compelling is that Europe needs to

you know rethink its position vis-a-vis the us and clearly i i was in rome a couple of weeks ago there's a lot of anxiety there europe feels like it's both in an economic economic but also security trap with washington but at the same time it's clear that trump doesn't regard the eu as a great power he's excluded them from negotiations with russia uh i think um you know we saw the eu um

sort of following the US down the path under Biden in terms of the animosity towards China. I think the EU needs to rethink its position regionally, needs to rethink its position with Moscow, needs to rethink its position with China and increasingly try to de-risk itself from the US instead of other countries with whom it really has no reason

It was doing good business with Russia before the US provoked this conflict in Ukraine, and it was doing good business with China. So I think that there are ways for the global economy to move past the United States, but it will be very, very difficult to do so given, again, this incredible position that the US holds, not only in terms of its ability to control the supernational currency, but also its ability to wage other forms of aggression.

Okay. Well, Dr. Li, as just now, Professor Mahoney mentioned, China, Japan, South Korea have pledged a coordinated response. And also he mentioned RCEP. And also we have the BRICS, for instance. So do you think these tariffs may push countries to form stronger trade partnerships with each other, excluding the U.S.?

Yes, I think countries somehow have to do that. There is actually no alternative. In fact, Chatham House has published a piece on how Trump is actually pushing China and Europe closer together.

There is also an opinion piece on the South China Morning Post that explains how Trump tariffs push Japan and South Korea closer together to China. So in fact, China has been seeing actively forming stronger trade partnership with others, like what Professor Mahoney has mentioned, the RCEP initiative.

China has the intention to actually expand the membership of the RCEP. And so again, back to my point earlier, I think the world might be delinking from the US economies because of the US global tariff plan. Not only that, I think there might be increased urgency to use alternative currencies for trade rather than relying predominantly on the US dollar. And that's why Professor Mahoney has said that there was an attempt for de-dollarization

in the past, and I think there's increasingly stronger call for that. And of course, the trilateral meeting of economic ministers between China, Japan and South Korea has proven that there is a move to actually think about how to navigate the Trump's tariff. And there was discussion during the meeting about how they should speed up talks on the South Korea-Japan-China free trade agreement deal. So in other words, I think all these tariffs are

can actually push countries stronger together to form better partnership with one another, which actually excluded the United States because there's no alternative. Well, Dr. Jomi, what's your thought on this? Do you think this could perhaps mark a turning point for this globalized economic system, which has long relied on U.S.,

strength and reliability? And to what extent do these matters signal a retreat from America's traditional leadership role in global economic governance? And also, could they also undermine the dominance of the US dollar as the world's reserve currency?

Well, that is a very big issue that we are talking about the possibilities of the development of governance. In my understanding that the world has changed a lot. So we, you know, in the past, maybe it is only the United States who can provide the world with enough certainties, with some kind of principles that they can do first and also trying to follow others.

to let others follow them. But now they don't want to do that. So actually they are trying to think about that in a different way. But the world is changing. I can also find that there are so many other developing countries and also some of the developed countries want to continue

with multilateralism and also trying to have the principle based on the most superior nations, national treatment, and some of the principles that we had in the WTO. So I don't think they can offer just the, you know, pick one choices from, you know, two alternatives. It is actually about how can we just speak to the belief that we had in the past and how can we change

continue to improve according to the new things. So we are in the position, in the situation, the world is changing so quickly and we need to try to keep up on improving the relations and trying to reduce the barriers for the collaboration among the different stakeholders. But in that way, if United States don't want to do that, we have to still continue with this purpose

So in this regard, I would say that US dollars maybe is a very important choice, but we still have more choices.

And I believe that international governance is always some kind of a very interesting part that many countries are trying to develop, as the professors have mentioned. The RCEP, also the BRICS, the APAC, different kind of mechanisms are giving the stakeholders different possibilities. So I would say that the world is, you know, having so many possibilities. And we are discussing any of the suggestions, if like-minded suggestions,

countries and stakeholders want to do that together.

Okay, thank you, Dr. Zhou Mi, Senior Research Fellow with Chinese Academy of International Trade and Economic Cooperation, Dr. Li Peimei, Assistant Professor of Political Science at the International Islamic University Malaysia, and Joseph Gregory Mahoney, Professor of Politics and International Relations at East China Normal University. Thank you again for being with us. And that's all the time we have for this edition of World Today.

To listen to this episode again or to catch up on previous episodes, you can download our podcast by searching World Today. And for further discussion, you can follow us on X at CGTN Video. I'm Zhao Ying. Thank you so much for listening. See you next time.