Trump tariffs shake markets—up to 20% duties loom. Wall Street braces for tariff rollout.

Trump’s trade strategy is escalating, with reports indicating that the administration is considering across-the-board tariffs of up to 20%. If implemented, this would mark the most aggressive trade realignment in modern U.S. history, impacting virtually every major trading partner. Wall Street is already bracing for impact. Goldman Sachs now expects core inflation to hit 3.5% in 2025, GDP growth to slow to just 1%, and unemployment to rise to 4.5%. The stock market, sensitive to uncertainty, has seen capital outflows for two consecutive weeks as investors weigh the fallout.

The numbers tell the story. The U.S. imported over $3.8 trillion in goods last year, with China, Mexico, and Canada as the top sources. A 20% tariff on those imports would immediately shift supply chains, increasing costs for manufacturers that rely on foreign components. But here’s the reality: the U.S. economy is far less dependent on exports than its trading partners. Mexico relies on U.S. trade for 28% of its GDP. Canada’s dependence stands at 19%. In contrast, U.S. exports to those nations make up less than 2% of America’s $27.7 trillion GDP. The leverage is clear.

Trump’s approach isn’t just about balancing trade—it’s about forcing a restructuring of the global economy. For decades, multinational corporations have offshored production, chasing cheap labor and maximizing profits while hollowing out American industry. The consequences have been dire. From 2000 to 2020, the U.S. lost nearly 5 million manufacturing jobs. Entire industries were dismantled, leaving the country vulnerable to supply chain shocks, as seen during the pandemic. These tariffs are a direct challenge to that model.

The Federal Reserve can’t cushion this shift. The era of cheap credit and infinite liquidity is over. Since 2020, the Fed has raised interest rates from near zero to over 5%, tightening financial conditions. The old playbook—pumping liquidity to mask economic distortions—won’t work. Companies that built their business models on outsourced labor and razor-thin margins will be forced to adapt or collapse.

China, the biggest target, is already in trouble. Foreign investment into China has plunged, and youth unemployment is so high that the government has stopped publishing the data. The European Union, facing stagnant growth, is in no position to retaliate against U.S. tariffs without harming itself.

This is economic warfare, and Trump is betting that America holds the stronger hand. The global economy is being rewritten in real-time, and the old system will not survive intact.