Jorge Jraissati
This week, President Donald Trump announced a comprehensive set of tariffs affecting nearly all U.S. trading partners. This policy includes a 20 percent tariff on goods from the European Union and an additional 34 percent tariff on imports from China. Combined with existing measures, this results in a cumulative tariff rate of at least 54 percent on Chinese imports, which could be even more if we count the administration’s 25 percent tariff on imports from countries that continue to import Venezuelan oil.
Branded as America’s “Liberation Day,” Trump’s initiative fundamentally reshapes the global trade landscape. While its economic consequences remain uncertain, one feature of the policy stands out: it is structured around several principles of game theory. It leverages power asymmetries, imposes strict time constraints, and fragments coordination among trading partners. In doing so, it reframes global trade as a multi-actor negotiation game, rather than a rules-based system.
Forced to Choose
The tariff policy leverages power asymmetries by exploiting virtually all countries’ disproportionate dependence on access to the U.S. market. Since countries export heavily to the United States, they have more to lose from a disruption in trade than the United States does. The tariffs capitalize on this imbalance by imposing large potential costs on those who hesitate or resist.
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