Cover Story: Trump’s Tariff-by-Tweet Tactics Are Pushing Global Trade Into Perpetual Uncertainty

President Donald Trump’s trade policy has shifted into a chaotic era, moving away from structured negotiations to a cycle of abrupt threats, shifting deadlines, and loosely defined agreements. This approach has left global commerce in a perpetual state of uncertainty. After multiple delays, Trump’s “reciprocal tariffs” took effect on August 7, targeting 67 countries with rates from 10% to 41%; the highest rates are imposed on Laos (40%), Myanmar (40%), and Syria (41%), with key partners like Canada seeing 35% and India at 25% (set to rise to 50% due to India’s purchase of Russian oil). China, as a principal target, faces renewed tariffs unless it negotiates a fresh extension by August 12. Trump’s strategy now consists of rolling deadlines, unclear deals, and the use of trade policy to achieve objectives beyond economics. Despite a promise to secure nearly 90 trade deals in 90 days, progress has lagged, and most agreements announced are not legally binding, leaving businesses and governments in an unpredictable environment [para. 1][para. 2][para. 3][para. 4][para. 5][para. 6][para. 7].

Agreements with key economic allies like Japan and the European Union suffer from vague or disputed terms. For example, Japan contests a new 15% U.S. tariff, and the EU’s promise to buy $250 billion of U.S. energy each year is widely seen as unrealistic. Trump’s practice of making deals via phone or social media has resulted in confusion and ambiguity. For instance, a Swiss trade proposal ended with Trump rejecting their offer and imposing a steeper 39% tariff out of personal frustration over the trade deficit, a move emblematic of the unpredictable and personalized nature of Trump’s approach [para. 8][para. 9][para. 10][para. 11][para. 12].

Foreign negotiators now prioritize managing Trump’s personality over traditional economic logic. Examples include South Korean officials wearing MAGA-style hats to meetings and Japanese negotiators delaying factual corrections to avoid contradicting Trump. Announced deals such as those with the U.K., Japan, EU, South Korea, Vietnam, Indonesia, and the Philippines feature reciprocal tariffs (UK: 10%, EU/Japan/South Korea: 15%, Indonesia/Philippines: 19%, Vietnam: 20%) and big investment or purchasing pledges, but few are formally documented or agreed upon by both parties. Even the headline figures, like Japan’s supposed $550 billion investment, are misrepresented and lack binding commitments. As a result, “perpetual negotiations” dominate, sustaining uncertainty for global commerce [para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22].

Trump’s trade policies are now destabilizing global supply chains. A new executive order applies a 40% duty on goods routed through third countries to evade tariffs, specifically aiming at Chinese products and threatening Asia's supply chains. This sidesteps international trade rules and is particularly damaging for Southeast Asia, where meeting stringent local-content thresholds is nearly impossible. The auto industry is also affected, with new tariffs disrupting established North American supply chains, leading American automakers like General Motors to report significant financial losses—GM cited a $1.1 billion loss due to tariffs, with a 35.4% decline in net profit in Q2 2025 [para. 23][para. 24][para. 25][para. 26][para. 27][para. 28].

The U.S. economy is showing signs of stress. July’s jobs report revealed only 73,000 new jobs, with past months revised downward by 258,000—the largest negative revision since 1979. Key indicators like private domestic demand and purchasing manager indices signal stagnation or contraction. While U.S. importers have so far absorbed most tariff costs, economists warn these will soon hit consumers, risking stagflation [para. 29][para. 30][para. 31][para. 32][para. 33].

Finally, the constant threat and unpredictability of U.S. trade policy are chilling global investment and pushing fragile industries to the brink. Fitch Ratings estimates these tariffs will reduce global income by $1 trillion over five years, further shrinking trade’s share of world GDP. This environment, where decisions are paralyzed and tariffs harm all involved, is a direct reflection of the current volatile order [para. 34][para. 35][para. 36][para. 37][para. 38].