As U.S. President Donald Trump continues to push for aggressive protectionist policies in his second tenure, most notably a new round of across-the-board tariffs, the global economy is once again being shaken.
With his 2024 Presidential campaign now transitioning into active policy preparation, Trump’s economic nationalism is back in the spotlight.
His proposal includes a 10 percent universal import tariff and higher levies on countries he deems “unfair trade abusers” such as China, Mexico, and even close allies in Europe.
The reverberations of these tariffs are already influencing global trade flows, reshaping diplomatic alliances, and impacting elections across major democracies.
Trump’s new tariff blueprint is a sharp escalation from his first term. It has proposed a 10 percent blanket tariff on all imported goods, along with additional country-specific duties— over 200 percent or more on Chinese imports.
According to Trump’s team, the tariffs are meant to protect American manufacturing, reduce dependency on foreign supply chains, and punish countries that use unfair trade practices.
Trump said that tariffs will raise revenue without raising domestic taxes and compel foreign companies to move operations to the U.S.
However, most economists said that these tariffs function as a tax on consumers, raising prices and straining global trade relationships.
Global trade, diplomacy and geopolitical repercussions
The ripple effects of Trump’s tariff plans go far beyond U.S. borders.
Globally integrated supply chains are being disrupted, pushing countries to seek trade alternatives and rethink dependencies.
U.S. allies are caught in a dilemma: either comply with the U.S. agenda or retaliate with their own trade measures.
This dynamic risks a new wave of global trade wars, echoing the retaliatory spirals of 2018–2019.
Geopolitically, Trump’s tariffs are driving a wedge between the U.S. and its traditional allies.
Countries in Europe and Asia are increasingly turning to regional trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) to shield them from U.S. volatility.
China is leveraging the uncertainty to position itself as a more stable trade partner for countries weary of American unpredictability.
Diplomatically, the Trump tariff revival is undermining multilateral cooperation, particularly within institutions such as the World Trade Organization (WTO).
As tariffs become tools of coercion rather than policy, the trust in the rules-based international order erodes, prompting countries to prioritise self-reliance and regionalism.
Australia: Election triumph amid trade realignment
Trump’s revived tariff policy had a subtle yet significant influence on Australia’s 2025 Federal elections, contributing to the incumbent Labour Party’s successful bid for a second term under Prime Minister Anthony Albanese.
As Trump’s plans for a blanket 10 percent import tariff and targeted duties on key trading partners gained traction in the U.S., global markets braced for renewed instability.
For Australia—a trade-dependent economy with strong ties to both the U.S. and China—the threat of disrupted supply chains, higher export costs, and weakened global demand became real concerns.
The Albanese Government capitalised on these fears, positioning itself as a steady hand in uncertain times and promoting its strategy of diversifying trade through regional agreements and strategic diplomacy.
Labour’s messaging highlighted its proactive efforts to shield Australia from global trade shocks by strengthening ties with ASEAN, pushing for reforms in supply chain resilience, and avoiding over-reliance on any one economic partner.
In contrast, the Opposition struggled to offer a coherent alternative, often downplaying the significance of global trade volatility.
Voters who were concerned about economic security and wary of the ripple effects of Trump’s tariffs, largely favoured continuity and pragmatism.
By framing itself as a Government that could navigate international turbulence while protecting domestic interests, the Albanese administration turned Trump’s protectionist rhetoric into an electoral advantage.
One of the quiet undercurrents shaping voter behaviour was the fear of global economic instability, particularly trade volatility stemming from Trump’s proposed tariffs.
Australia, heavily reliant on both U.S. and Chinese markets, finds itself in a precarious position.
Trump’s tariffs threaten to disrupt global demand for key Australian exports such as minerals, wine, and education.
Australian manufacturers and farmers have raised alarms about losing competitiveness in both American and Asian markets due to trade diversion.
The Albanese Government successfully framed itself as a stabilising force amid global economic storms, promoting regional trade ties and advocating for economic diversification.
Voters rewarded the Government’s focus on pragmatic diplomacy and economic resilience, which was seen as a buffer against the chaos of Trump-style protectionism.
Canada: Tariff worries and Liberal gains
Trump’s renewed tariff agenda significantly influenced Canada’s recent federal election, with trade-related anxieties playing a central role in shaping voter preferences.
As Trump outlined plans for a sweeping 10 percent tariff on all imports and potential sector-specific penalties—particularly targeting automotive and dairy products—Canadian industries braced for impact.
The memory of the 2018 steel and aluminium tariffs, which blindsided Canada despite its close alliance with the U.S., resurfaced during the campaign.
The Liberal Party, led by then Prime Minister Justin Trudeau, seized the moment to position itself as the most capable steward of Canada-U.S. relations in uncertain times, emphasizing its track record in trade negotiations and commitment to multilateral diplomacy.
The Liberals’ campaign focused heavily on economic stability and resilience, promising to diversify trade away from U.S. dependency by expanding ties with Europe, Asia, and Latin America.
They also highlighted investments in local manufacturing, technology, and green industries as part of a broader strategy to make Canada more self-sufficient in the face of external trade shocks.
Canada’s Federal elections produced a surprising boost for the Liberal Party, which not only maintained its minority Government but also gained several new seats.
A key factor behind the voter swing was concern over Trump’s proposed tariff measures and their potential impact on Canada’s heavily trade-dependent economy.
Canada has historically been one of the first targets in Trump’s trade wars.
Steel and aluminium tariffs in 2018 were a bitter reminder of how fragile trade ties with the U.S. could become.
With Trump threatening to impose new blanket tariffs, Canadian industries—especially automotive, dairy, and tech—could again face crippling costs.
The Canadian administration leaned into these fears, campaigning on the need for stable trade diplomacy and defending Canada’s interests through multilateral channels.
But the new Prime Minister Mark Carney visited the White House on last Tuesday for his first talks with Trump and bluntly told the U.S. President that Canada would never be for sale.
Carney who won the April 28 election on a promise to push back against U.S. tariffs and talk of annexation, later said he had also asked Trump to stop referring in public to Canada as the 51st State.
Overall, Carney termed the meeting as constructive, and said the two sides would start serious talks on a new relationship he insists is needed in the wake of the tariffs.
While Canada remains one of the U.S.’s top trading partners, the reemergence of aggressive American protectionism under Trump has already strained bilateral ties.
For both countries, the outcome signals a shift towards cautious engagement.
While Canada values its relationship with the U.S., it will no longer assume special treatment or automatic alignment under a Trump-led administration.
Instead, it is preparing for a more self-reliant and globally balanced economic strategy.
For the U.S., the Canadian election result serves as a reminder that its domestic policies—especially those as disruptive as tariffs—can have significant political ripple effects beyond its borders, influencing elections, shaping alliances, and redefining long-standing partnerships.
Singapore: Stability over change in a global crossfire
Singapore’s 2025 general election resulted in a clear win for the long-dominant People’s Action Party (PAP), led by newly appointed Prime Minister Lawrence Wong.
As a highly trade-dependent economy, Singapore was particularly sensitive to Trump’s tariff threats.
The PAP presented itself as the safest pair of hands to navigate a turbulent global economy.
Singapore’s economy, anchored on exports, financial services, and logistics, stands to lose substantially if a new wave of tariffs disrupts global supply chains.
American tariffs could reduce demand for Singaporean intermediary goods and complicate logistics across Asia.
Wong’s Government emphasized continuity, economic resilience, and closer engagement with ASEAN and regional trade blocs to counterbalance U.S. unpredictability.
Voters, wary of global shocks and reassured by the PAP’s record of economic stewardship, chose to stick with the status quo rather than gamble on inexperienced Opposition parties.
Trump’s trade policies thus indirectly reinforced political conservatism in Singapore, as voters prioritised stability in uncertain times.
The PAP at the election secured 87 out of 97 parliamentary seats and increasing its popular vote share to 65.6 percent, up from 61 percent in 2020.
Wong, a U.S.-trained economist and former Finance Minister, campaigned on a platform emphasizing stability and continuity, especially amid global economic uncertainties.
He highlighted the importance of experienced leadership to navigate challenges posed by international tensions, including U.S. tariff hikes.
The election’s context was heavily influenced by global trade dynamics, notably the protectionist policies and tariff increases initiated by former U.S. President Trump.
Singapore, being a trade-dependent economy, faced potential risks from these policies.
The PAP leveraged concerns over economic volatility to appeal to voters seeking a steady hand in governance.
Analysts have said that voters favoured the PAP’s promise of stability over the Opposition’s calls for change, reflecting a broader trend observed in other countries such as Australia and Canada, where incumbent parties also secured victories amid global uncertainties.
Singapore’s 2025 general election reaffirmed the PAP’s dominant position, with voters prioritising experienced leadership and stability in the face of global economic challenges, including those stemming from U.S. trade policies.
What next for the world?
Trump’s tariff agenda is not just an economic issue—it’s a global political force.
Upcoming elections in South Korea, Japan, and parts of Europe could be influenced by the same dynamics that played out in Australia, Canada, and Singapore.
As fears of trade instability grow, incumbents who position themselves as competent managers of global economic uncertainty are likely to benefit.
Conversely, nationalist and protectionist parties may also gain traction in countries hit hardest by U.S. tariffs, especially where economic pain translates into populist resentment.
The divergence in electoral outcomes will largely depend on how Governments frame the impact of Trump’s policies—either as external shocks requiring calm leadership or as justification for nationalist backlash.
Shields against Trump’s tariffs
Around the world, countries are exploring alternatives to withstand or bypass the impact of Trump’s tariffs.
Strengthening regional trade agreements is one of the options now most countries consider. Nations are fast-tracking membership in trade pacts such as the RCEP and CPTPP to reduce reliance on U.S. markets.
Diversifying export markets is another alternative many countries including Sri Lanka has been eying. Countries are in the process of expanding trade with the EU, Africa, and Latin America to cushion against potential U.S. trade restrictions.
Domestic resilience plans are also mooted now in the face of Trump’s tariff policy: Governments are investing in local manufacturing, supply chain resilience, and innovation to reduce vulnerability and reliance.
Digital trade and services is also another alternative the world minus U.S. can consider: With physical goods at risk from tariffs, some economies are pushing harder into digital services, e-commerce, and remote work sectors less susceptible to tariff imposition.
Some countries are forming informal coalitions to collectively respond to protectionist shocks—sharing intelligence, lobbying power, and trade defence mechanisms.
