Special Issue Title: Trump’s Tariffs War-Impacts and Implications to World Trade

Guest Editor:
Prof. Dr. Badaar Alam Iqbal; Adjunct Professor;
Monarch Business School, Switzerland
Email ID: dr.badar@umoarch-email.ch

Special Issue Information

United States President Donald Trump’s aggressive tariff regime towards major world economies has resulted in mixed economic outcomes across the regions. Due to the trump’s announcement, the US economy Squeezed by 0.3 per cent during quarter 1 of 2025, resulting into the first decline in last three years, Similarly, China’s factory operation goes down to a 16-month low, while Taiwan’s GDP surged 5.4 per cent on pre-tariff tech exports. Europe saw 0.4 per cent growth before tariffs hit, and Canada is on track to miss GDP estimates. From the US and Europe to China and Taiwan, the repercussions of his aggressive trade policies are visible in everything from factory output to GDP forecasts.

The main logic given by the Trump administration for the sweeping tariff policy is to restore balance to the USA’s trade relations with major trading partners and protect US industries. But the reality is somewhat different. When analysed the available economic data, trends and situation revealed a far more imbalanced scenario across regions of the world. Trade experts believe that a sweeping rise in US tariffs in 2025 is impacting world trade in a big way. Added to this, the increase in existing tariffs may distort output patterns and also may lead to a sharp reconfiguration of world value chains, resulting in a less efficient and more opaque trade system.

Emerging Observations:

In February and March 2025, the rise in tariffs has impacted imports from Canada, Mexico, and China, especially steel, aluminium, and cars. It is believed that the US sweeping so-called “reciprocal” tariffs are affecting most of its trade partners. The structure of these new measures, rather than being driven by actual discrepancies between US tariffs and those imposed by trade partners, is instead guided by the ratio of trade deficits to imports, with a minimum increase of 10 percentage points – far exceeding market expectations (Baldwin and Barba Navaretti 2025, Evenett and Fritz 2025).

Southeast Asian countries, namely Vietnam, Indonesia, and Malaysia, are among the most seriously affected. Similarly for the EU, the announced tariffs would raise the effective tariff rate to around 17per cent, up from below per cent before the beginning of Trump’s second term. China’s initial retaliation to the US’ announcement triggered a tit-for-tat escalation of symmetric tariff hikes, which led the two countries to reach a bilateral tariff rate of around 12 per cent (Francesco et al, May 2025).

Understanding the implications of sweeping tariff measures does require a clear-cut view of the tariff landscape prior to President Trump’s second term. Yet accurately measuring applied tariffs remains a challenge (Caliendo et al. 2023, Teti 2024). To overcome the limitations of the widely used WITS database – particularly its omission of tariffs imposed through trade disputes – we use as a starting point the 2019 CEPII MAcMap-HS6 database (Guimbard et al. 2012) and incorporate detailed data on tariff escalation between the US and China during Trump’s first term [Fajgelbaum et al. (2024), as well as tariff reductions granted under Biden’s term. As a matter of fact, the new tariff measures are certainly higher than what is required to achieve genuine reciprocity.

Considering that the magnitude is exceptionally high even by historical parameters, the new tariffs may have far-reaching effects on macroeconomic aggregates, trade patterns, and the structure of global value chains (GVCs). Based on the available database, three possible scenarios could examine the potential impact of the 2025 measures on global trade and the economy.

First, there is a mild scenario involving the February and March 2025 measures, the observed tariff escalation with China, and the suspension of the reciprocal tariffs announced on 2 April. In this ‘status quo’ scenario, we also include the retaliation implemented by China and Canada. The ‘full’ scenario, instead, assumes no suspension of the 2 April tariffs, combined with the extension of tariffs to pharmaceuticals and electronics, as already announced. We assume that these products will face tariff increases in line with those previously imposed on steel, aluminium, and cars – i.e., a 25-percentage point hike (Francesco et al, May 2025).

Lastly, we also evaluate the possibility that affected countries retaliate by matching US tariff increases at the sector level (‘full + retaliation’).

With these given observations, it has become imperative that academicians and experts should be invited to study the emerging issues in-depth, intensively, and extensively in terms of impacts, implications, and bring out the possible solutions to minimise the effects on global trade and economy. The following topics may be covered:

  • Impact on global trade;
  • Impact on the growth of the world economy;
  • Impact on global GDP and Inflation;
  • Impact on International Business
  • Global Recession;
  • Global Business Confidence;
  • Globalization.

All papers should be submitted under the "Trump’s Tariff War- Impacts and Implications to World Trade" section.

Submission Guidelines:
Authors wishing to submit papers for this special issue should prepare their manuscripts according to the author guidelines provided on the International Journal of Economic Sciences website. Submissions must be original and not under consideration elsewhere during the evaluation process.

Tentative timeframe for Special Issue:

Call for papers: May 30th, 2025
Submission of papers: November 30th, 2025
Tentative publication of special issue: June 30th, 2026