100 days of Trump: Tariffs, strategy, and global fallout

The first 100 days of Donald Trump’s presidency have been marked by sweeping promises, dramatic policy shifts, and a consistent effort to reassert US power on the global stage.

But according to two leading experts from Warwick Business School, the administration’s early actions on trade and international relations reveal a dangerous misunderstanding of economic fundamentals and a pattern of strategic failure.

“Those of us who study trade and investment for a living are, I suspect, becoming exasperated with both the White House stance on tariffs and the way that this is reported in much of the media,” says Nigel Driffield, Professor of International Business.

“Trump believes that if a country has a trade surplus with the US it is somehow playing unfairly and needs to be dealt with. But anyone who understands the basics of international economics will recognise the fallacy in both of these beliefs.”

The problem with tariffs

Tariffs have become the centrepiece of Trump’s economic strategy. Yet, as Professor Driffield explains, the logic behind them is flawed.

He says: “Trade takes place based on what economists call ‘comparative advantage’ – countries import those goods that are otherwise relatively expensive for them to produce. And they export what they produce cheaply relative to other countries.”

The administration’s aim, he says, is clear: “Trade policy in the form of tariffs is designed to make imports more expensive and encourage buyers to switch to domestic producers, but this assumes two things. First, that the demand for such imports is relatively price sensitive, and second, that there are domestic producers able to fill this gap at an appropriate price.”

According to Irina Surdu-Nardella, Professor of Strategy and International Business, the deeper issue is not just flawed economics, but poor execution.

“100 days of Trump have resulted in several regulatory and diplomatic initiatives that are much needed but severely failed at their execution,” she says. “If strategy is only as good as its execution, Donald Trump has – as of yet – failed to execute.”

This failure is especially apparent at home, where the fallout from tariffs has been uneven.

“Most US officials and members of the public fully agreed with the notion that jobs need to be brought back to the US,” says Professor Surdu-Nardella. “However, a one-size-fits-all approach has resulted in certain parts of the US bearing most of the costs of such decisions.”

She points to Michigan as an example: “Automotive firms are laying off their staff, suppliers are going bankrupt as they struggle to honour contracts, firms are focused on creating more inventory to secure supply and dealers are left with increasing prices for customers – this is all in an industry that accounts for 25 per cent of jobs in such a state.”

Tariffs rarely work

Meanwhile, Professor Driffield warns that tariffs have rarely worked in practice. 

He adds: “This type of trade policy has been tried, but has seldom been shown to be effective.”

He likens the fixation on trade deficits to a consumer blaming their corner shop:

“They sell you things, you give them money, but they never buy from you," he says. "That the US has a trade deficit is not a sign that the rest of the world is ‘ripping it off’. It is a reflection of an affluent society with relatively high wages buying products from countries that can produce them more cheaply.”

Global ripple effects

On the international front, the consequences of Trump’s early policies have also been far-reaching.

“Trump’s decisions caused chaos and in that some opportunity – they have led to a more united Europe that is now more focused than ever on reducing dependency on the US,” says Professor Surdu-Nardella. “Which was once their most trusted ally and trade partner.”

In the Ukraine-Russia conflict, she notes that Trump’s unpredictable interventions have weakened trust.

She adds: “The flippant nature of Trump’s statements has resulted in decreased confidence that US leaders have Europe’s best interests in these negotiations.

"Europe is investing more in its defence capabilities to strengthen the European wing of NATO, were they to lose US support.”

Rising costs at home

Back in the US, the economic costs continue to mount. As Professor Driffield points out, tariffs on crucial imports like steel and petroleum gas “will simply push prices up for US consumers,” while exposing how little governments can do to disrupt deeply integrated global supply chains “unless they seek to break them all together.”

Professor Surdu-Nardella adds: “Tariffs have caused panic, unrest, intensified nationalist movements, and repeatedly crashed stock markets.”

Trump’s presidency has offered no shortage of disruption after 100 days, but as these expert insights show, disruption without understanding or execution can be a dangerous - and costly - experiment.

Further reading:

Why Trump's tariffs will hurt America first

Trump wants more trade tariffs. What would that achieve?

Did Trump's tweets move the currency markets?

Why The Rock trumps politicians for leadership

Nigel Driffield is Professor of International Business and Deputy Pro Vice Chancellor for Regional Engagement. He is also Midlands Lead for The Productivity Institute and teaches on the Undergraduate programme.

Irina Surdu-Nardella is Professor of Strategy and International Business and teaches International Business on the Executive MBA (London), Accelerator MBA (London), and Global Online MBA (London). She also lectures on Global Challenges in Management and Sustainability on the suite MSc Business courses.

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