Former U.S. President Donald Trump has announced a bold new trade policy, vowing to impose 100% tariffs on any nation that moves away from using the U.S. dollar as the world’s reserve currency, should he return to office. His aggressive stance aims to maintain the dollar’s global dominance by penalizing countries that shift to alternative currencies in international trade.
Trump’s tariff proposal has sparked widespread discussion about its potential impact on global trade dynamics. Some experts argue that such a policy could create significant disruptions in international commerce, while others see it as an attempt to strengthen America’s economic leverage.
During a tense interview with Bloomberg Editor-in-Chief John Micklethwait at the Economic Club of Chicago, Trump defended his tariff strategy, claiming it would benefit American manufacturing. “The higher the tariff, the more likely it is that the company will come into the United States and build a factory,” Trump said, dismissing concerns about inflation and strained relationships with U.S. allies.
Micklethwait pressed Trump on how consumers would cope with rising prices while companies adjust to new manufacturing in the U.S. Trump responded, “I could make tariffs so high, so horrible, so obnoxious that they’ll come right away.” He suggested that tariffs on foreign-made products could reach as high as 200%.
The discussion brought to mind historical comparisons to the Smoot-Hawley Tariff Act of 1930, which many economists link to the Great Depression. Micklethwait questioned whether Trump’s tariff policies could lead to similar economic fallout. Trump, however, dismissed the comparison, though he did not provide details on how his plan would avoid sparking a trade war.
Desmond Lachman, senior fellow at the American Enterprise Institute, has criticized Trump’s proposed tariffs, warning of severe economic consequences. “It is difficult to see how such a unilateral trade policy…would not lead to retaliation by our trade partners,” Lachman wrote, suggesting it could result in major disruptions to the global trading system and increase the risk of a worldwide recession.
Trump also weighed in on monetary policy during the interview, stating that he believes the president should have more influence over Federal Reserve decisions. However, he stopped short of confirming whether he would support Jerome Powell’s continuation as Fed chair.
The former president has emphasized that his proposed tariffs would encourage companies to relocate their operations to the U.S., promising lower corporate tax rates, fewer regulations, and affordable energy as incentives. “The higher the tariff, the more likely it is that the company will come into the United States,” he reiterated.
In addition to his trade policies, Trump’s remarks also touched on other economic proposals, including potential tax cuts for American workers and incentives for businesses that hire U.S. labor. His vision for the economy, he argued, would lead to growth rather than the stagnation predicted by his critics.
