Donald Trump’s administration has turned the world upside-down with their aggressive implementation of international trade policies. These steps, taken by both the US and China, have created unprecedented opportunities while presenting grave threats to international relations. This new approach shifts the focus toward a race for critical minerals and rare earths. At the very least, Trump is recklessly pursuing deals that affect trillions in economies around the world. His recent threats of steep tariffs on Europe and other nations are causing ripples in international markets, while his intervention in longstanding conflicts showcases a multifaceted strategy that prioritizes trade.
The Race for Critical Minerals and Tariffs on Europe
Soaring demand for critical minerals & rare earths In reaction, Trump went all-in on making the U.S. the front-runner in this global race. These materials are critical inputs for other industries, such as technology and renewable energy industries. Continuing this trend Under Trump’s leadership, the US has dramatically increased its efforts to claim these resources. This change has ushered in a new level of competition, most notably with China.
In a mercantilist’s dream, Trump has warned Europe to expect a punishing 50 percent tariff on their goods. This new transatlantic trade relations test lasts until June 30. It demonstrates an openness to get back into the weeds on tough negotiations. These kinds of tariffs could trigger tit-for-tat responses from European countries, making an already high-stakes situation worse. Analysts claim that this hawkish approach is meant to shake up the status quo of trade relations. They contend it will be in America’s long-term interests.
The impact of these tariffs will be felt well beyond Europe’s borders. By pulling the rug out from under global supply chains with his extreme policy agenda, Trump is especially hurting industries that depend on imports from this continent. As an example, Germany’s auto industry is currently raising a huge stink about the negative effects potential tariffs would have on their production chains and costs. While countries are forced to react to these disruptive moves, the world is forced to react to a more tense and dangerous international trade scene.
Diplomatic Maneuvers and Regional Pressures
Meanwhile, Trump has dominated headlines with his tariff boogeymen. He waded into a decades-long rivalry between Rwanda and the Democratic Republic of the Congo (DRC) in perhaps his most impressive diplomatic flourish. This intervention is meant to give a flavor of Trump’s willingness to use trade agreements as instruments of geopolitical influence and firepower. By positioning the US as a mediator, he seeks to stabilize regional dynamics to advance national interests, all while protecting US economic interests at home and abroad.
Trump’s administration is applying pressure on Southeast Asian nations like Indonesia and Thailand to impose restrictions on Chinese investment and export controls. This tactic fits within his larger goal of opposing China’s growing presence and influence in the region. Beyond words, Trump is pressuring these nations to curb their economic relations with China. His goal is to strengthen US interests and US influence while changing the geopolitical map to do so.
These moves certainly have not escaped the attention of the other countries. Australia is actively tracking this fast-developing landscape. Its goal is to be able to play both the US and China off of one another to its own advantage. The broader consequences of the Trump administration’s moves may yet affect Australia’s economic policy agenda and diplomatic posture towards the rest of the Asia-Pacific.
Trade Deals and Their Global Impact
On April 2, Trump announced his first round of tariffs. His decision resulted in a crushing 46 percent tariff on a variety of goods, wreaking havoc on Vietnam’s economy. This decision was meant to refocus US trade with the rest of the world. It addressed “trans-shipping” worries, the practice of rerouting goods through third countries to avoid tariffs. Accordingly, he slapped an average 40 percent tariff on re-exported goods from Vietnam.
As tariffs climbed on Chinese goods, Trump cut an agreement with Vietnam. This pact further lowers tariffs on Vietnamese exports to the US to a mere 20 times the normal tariff. He heralded this deal as a grand slam victory. It opens the door for American products—especially agricultural products—to come into Vietnam free of any tariffs. Critics say these deals are more about show than actual economic return. As they note, only three trade agreements have been completed since his “Liberation Day” declaration.
This continuing US-China trade “arms race” is adding even more uncertainty to the equation. Countries around the world are looking to see how far Trump goes in implementing his proposals and considering their own actions accordingly. As nations grapple with potential trade disruptions and shifting alliances, the long-term effects of Trump’s approach could redefine global economic relationships.
