Trump’s tariffs wars and aid shutdowns are foolish and immoral

About 95 years ago, the Smoot-Hawley Tariff Act aimed to protect American industries by imposing record tariffs on imported goods.

Despite warnings from economists, President Herbert Hoover plowed ahead, triggering swift retaliations from major trading partners. U.S. exports plummeted, global trade shrank and the Great Depression deepened, worsening global economic instability, contributing to turmoil that would later fuel World War II. It was a disaster.

Recognizing its failure, the U.S. reversed course with the Reciprocal Trade Agreements Act of 1934, promoting international trade instead of protectionism. The whole episode serves as a textbook example of how trade wars backfire, choking commerce and harming economies rather than helping them.

But President Trump doesn’t seem to know this, and so he’s threatening a brutal tariff war with America’s democratic neighbors (as well as with China — less indefensible) while also abandoning the world’s most vulnerable by shutting down USAID and halting nearly all foreign aid. It is a master class in how to be both stupid and immoral at the same time.

The decision to impose 25 percent tariffs on Canada and Mexico has been suspended for a month after those countries threatened counter-tariffs and offered some concessions to Trump’s demands. Let’s hope that Trump pockets this fake win and does not return to an attitude that violates existing free trade agreements and would harm U.S. consumers.

Trump’s justifications for the tariffs range from the absurd to the incoherent. He initially framed them as a way to combat fentanyl trafficking, a scourge that has devastated American communities. Yet Canada plays almost no role in the fentanyl crisis, and Mexico had already taken significant steps to curb trafficking.

The real effect of these tariffs will be higher consumer prices, disrupted supply chains and job losses. Retaliatory tariffs would further squeeze American exporters. And for what? The U.S. runs a relatively balanced trade relationship with Canada and Mexico. In 2023, the trade relationship with Canada amounted to $441 billion in exports versus imports of $482 billion; in 2022, it totaled with Mexico exports of $362 billion versus imports of $493 billion.

For context, in Trump’s first term he placed tariffs on Canadian lumber. This, together with tariffs on aluminum and steel, was estimated to cost the average U.S. family at least $300 per year. The current threatened tariffs could cost 10 times that much.

Meanwhile, if Trump’s tariffs are merely foolish, his move to halt nearly all foreign aid and decision to shut down USAID is also immoral.

Foreign aid — less than 1 percent of the federal budget — serves as a strategic instrument of soft power, fostering diplomatic goodwill, economic ties and geopolitical stability. By investing in education, health care and infrastructure in developing nations, donor countries create long-term alliances, enhance their global influence and mitigate security risks that arise from instability and poverty, which can also drive migration. Aid strengthens economic partnerships, ensuring favorable trade relations and access to emerging markets, making it a tool of enlightened self-interest.

It is also a version of charity toward countries that are less fortunate due to twists of history. Moreover, former colonial powers have a moral duty to address historical injustices by supporting nations they once exploited.

While some of the foreign aid — to Israel and Egypt, for example — is military, the component that goes through the USAID organization is purely for societal development. Thus, for example, Armenia, which is trying to stabilize its educational and public institutions, receives various funds from USAID — including for the American University of Armenia, which is a major source of social development. Keeping Armenia advancing toward democracy in the combustible South Caucasus is a U.S. geopolitical interest.

This is the outfit that Elon Musk has puzzlingly called “a criminal organization.” Musk has said the suspension of its programs will be permanent, which would mean the trashing of programs like these:

USAID supported country-led efforts to combat the HIV/AIDS epidemic in over 50 countries, providing treatment and prevention services to millions. The Malaria Vaccine Development Program, now halted, aimed to reduce child mortality by developing effective malaria vaccines, particularly in sub-Saharan Africa. The Feed the Future Initiative focused on reducing poverty and under-nutrition by promoting agricultural development and improved nutrition. USAID’s Office of Food for Peace addressed emergency food needs arising from natural disasters and emergencies.

The Borlaug Higher Education Research and Development Program aimed to train individuals and strengthen institutions in developing countries to promote innovation in agriculture. Through the organization HEARTH, USAID aimed to promote conservation of threatened landscapes and enhance community well-being by partnering with the private sector to align business goals with development objectives.

To such calamities we can add domestic ones: Trump muses about killing the Federal Emergency Management Agency, about which he signed an executive order for a “full-scale review.” FEMA provides most of the aid to states like Florida that are being pummeled by hurricanes like never before due to global warming, which Trump continues to deny.

All of this madness will lead to increased famine, disease, suffering and economic instability, while handing geopolitical influence to China and Russia — who are not sitting still, and are investing huge efforts to establish influence in the developing world.

The U.S. is a global leader whose policies shape the fate of millions and, once upon a time, even aimed to inspire. It is stunningly reckless for the Trump administration to kneecap America’s economy and eviscerate soft power built over decades, handing a massive win to the world’s autocracies.

At some point Americans must ask: Is this the leadership we want? The coming 21 months are a teachable moment.

Dan Perry is the former Cairo-based Middle East editor and London-based Europe-Africa editor of the Associated Press, the former chairman of the Foreign Press Association in Jerusalem and the author of two books.

Topics

Do Trump's tariffs mean the end of the post-war free trade world?

President Trump has proposed a sweeping set of tariffs. Does this mark the end of the post-war free trade world?
BBC News - 7h
Trump, Tariffs, Taylor, Texts

President Trump announces 25% tariffs on steel.
BBC News - 12h
Schumer warns GOP against a 'Trump shutdown'

Politico - 16h
How Trump's tariffs are a political tool

President Trump's expected tariffs on steel and aluminum could impact U.S. allies around the world. CBS News' Weijia Jiang breaks down how Mr. Trump's tariffs are part of his political arsenal.
CBS News - 11h
Schumer warns of 'Trump shutdown,' lays out 4-pronged plan for Democrats

Senate Democratic Leader Chuck Schumer (N.Y.) in a letter to colleagues Monday warned of the possibility of a “Trump shutdown” and reminded fellow senators that Democrats have the power to make or ...
The Hill - 15h
Trump’s tariffs don’t scare stocks

Plus the energy-inflation link
Financial Times - 1d
US and China on edge of trade war as tariff deadline looms

Donald Trump’s shock tactics may have pushed Beijing away from negotiating table, experts say
Financial Times - 2d
With Aid Cutoff, Trump Severs a Lifeline for Millions

Shock and grief rippled through the health community as lifelines for care were abruptly severed.
The New York Times - 2d
Trump’s Foreign Aid Freeze Leaves Millions Without HIV Treatment

President Trump’s pause on aid, and the gutting of the primary aid agency, could jeopardize the health of more than 20 million people worldwide, including 500,000 children, experts say.
The New York Times - 5d