Donald Trump becomes more protectionist and escalates tariff threats

President Donald Trump has stepped up threats to impose higher tariffs on imports if elected to a second term, reviving fears of a return to the trade wars that have battered the global economy during his presidency.

Republican candidates seeking to win over blue-collar voters in key battleground states in November’s presidential election have doubled down on protectionist rhetoric and openly threatened tariffs against U.S. trading partners, including the European Union.

On Saturday, Trump went further, pledging to impose 100% tariffs on imports from countries that are moving away from the dollar, a move that could pose a threat to many developing countries as well.

“We’re going to say, ‘Give up the dollar and we’re not going to trade with the United States because we’re going to put a 100 percent tariff on your products,'” he said at a rally in Wisconsin.

“If we lose the dollar as a global currency, I think it would be like losing a war,” he told the Economic Club of New York on Thursday.

As he competes for the White House against Democratic candidate Kamala Harris, President Trump has revived his “America First” economic policies and vowed to impose tariffs of up to 20% on all imports.

“I’m talking about taxing foreign countries at a level that they’re not used to, but they’ll get used to it quickly,” Trump said in New York last week.

One former trade official familiar with Trump’s thinking on trade said he also could reimpose tariffs that President Joe Biden suspended, including on steel and aluminum imports and European products, as part of a long-running dispute over aircraft subsidies.

“The Biden team delivered a big win for the Europeans right from the get-go. They gave the Biden administration nothing,” he said. “The EU is using the rules to help its own companies and hurt American companies.”

European officials have warned they are preparing options for retaliation. Trump’s term in office has been marked by an economically damaging trade war with China.

Trump’s new tariff threats are likely to be rebuked by Harris during Tuesday night’s presidential debate, an opportunity for both rivals to lay out their plans for the economy, the issue most important to voters ahead of the November vote.

Harris has criticized President Trump’s plan to impose tariffs on all imports as a “Trump tax” on American consumers that would hurt middle-class families.

“Donald Trump wouldn’t even pass an introductory economics course,” said Harris campaign spokesman James Singer. “His reckless tariffs are a national sales tax that would cost middle-class families about $4,000 a year while giving tax breaks to billionaires and big corporations.”

Democrats also support a more aggressive use of tariffs. The Biden administration has maintained most of the tariffs on Chinese imports imposed by Trump and also announced a tax of up to 100% on electric vehicles imported from China.

Trump has not provided details about his plans to impose tariffs on countries that move away from the dollar, but they could hit several major G20 developing nations, including China, India, Brazil and South Africa, and even countries that use the euro for trade.

President Trump has proposed imposing a 60% tariff on Chinese imports and has said Chinese cars coming into the US via Mexico should be subject to a 100% tariff.

President Trump said last week that he preferred tariffs to sanctions as a tool in international relations, saying sanctions “kill the dollar and kill everything the dollar stands for.”

But economists have warned that 100% tariffs could be counterproductive.

“The dollar’s global role arises from the fact that countries voluntarily choose to use it for all international transactions,” Brad Setzer, a fellow at the Council on Foreign Relations and a former Treasury Department official, wrote in X.

Gregory Daco, chief economist at EY-Parthenon, said this kind of tax would have “devastating consequences for the U.S. economy,” stifling consumer spending and business investment and stifling growth.

Daco said tariffs of 60 percent on Chinese imports and 10 percent globally, along with the resulting retaliation, would shave 1.2 percentage points off GDP growth in 2025 and 2026, to 0.5 percent and 0.8 percent, respectively.

During Trump’s time in the White House, his tariff plans, which he said ran counter to Republican free-market principles, faced opposition from some economic advisers and Republican lawmakers.

Resistance within the party is weakening.

In an interview with the Financial Times, Patrick McHenry, the Republican chairman of the House Financial Services Committee, criticized the “overheating” over Trump’s proposal.

“Commerce around the world has greatly benefited America. [and] “The United States has provided strength and room for growth for the dollar, but President Trump wants to ensure that U.S. interests are given greater weight in these efforts,” he said.

Former President Trump’s trade official said the former president was simply trying to return the U.S. to “stable” politics. “You’re not going to get back to stable, normal politics unless voters feel like the economy has changed for the better for them.” [American workers]” the official said.

In a recent interview with the Financial Times, Trump’s running mate, J.D. Vance, suggested that the U.S. could raise tariffs on NATO allies to force them to spend more on defense. “I think we have to be prepared to put pressure on our allies to actually increase their defense spending,” he said.

But higher US tariffs on EU goods would automatically mean retaliatory tariffs on iconic American products like Harley Davidson motorcycles and bourbon whiskey.

An EU response could also include blocking foreign investment and imposing penalties on procurement bids that benefit from subsidies.

“Trump’s view is the same as last time, so we’d better be prepared,” the EU official said.