Interview with Mustafa Aziz, President of the Morocco of Tomorrow Movement

1. Why is President Trump imposing these tariffs now?

Trump’s recent statement at the Economic Club in Chicago—“For me, the most beautiful word in the dictionary is ‘tariff’”—highlights his deep-rooted economic nationalism. Throughout his presidency, he has branded himself as the “Tariff Man,” believing that trade restrictions protect American jobs and industries.

However, these tariffs distort free markets, cause economic losses, and harm consumers by raising prices and decreasing efficiency. Instead of being an effective economic strategy, this move is a short-term political maneuver aimed at rallying working-class voters. The real danger lies in the long-term economic damage.

2. How did Canada respond?

Prime Minister Justin Trudeau quickly retaliated by imposing counter-tariffs on American goods, stating: “We did not ask for this, and we did not want to reach this point, but we will not back down from defending Canadians.” The Canadian retaliatory measures include a 25% tax on American beer, wine, household appliances, furniture, clothing, and other products.

Trudeau also warned of potential non-tariff actions, such as restricting exports of vital minerals or preventing American companies from winning Canadian government contracts. From a game theory perspective, this response follows a “tit-for-tat” strategy aimed at strengthening Canada’s negotiating position while minimizing internal economic damage. However, trade wars tend to escalate, often resulting in suffering for both parties instead of effectively resolving the dispute.

3. How will these tariffs impact the American economy?

• Short-term: American consumers will face rising prices, especially on imported goods subjected to retaliatory tariffs.
• Long-term: Disruptions in supply chains will reduce the global competitiveness of American industries, increasing inflationary pressures.
• Tariffs encourage political pressure and monopolies instead of stimulating real economic growth.
• Protectionist policies lead to inefficiency, as companies focus more on avoiding tariffs rather than improving productivity.
• Additionally, Canada is one of the largest importers of American goods, so a prolonged trade war could lead to economic contraction on both sides.

3. What was Mexico’s reaction?

Mexican President Claudia Sheinbaum strongly condemned Trump’s remarks linking Mexico to drug trafficking, calling them “slander.” In response, Mexico announced retaliatory tariffs on American exports in agriculture, automotive, and energy sectors. Strategically, Mexico is working to strengthen its trade relationships with China and other partners to reduce its dependence on the U.S. market. These tariffs threaten the integration of the North American economy and could yield counterproductive results due to the deep interconnectedness of the U.S., Canadian, and Mexican economies.

5. How is China responding?

China has pursued two primary strategies:

1. Filing a complaint with the World Trade Organization (WTO) against the American tariffs, based on the principle of “most-favored nation.”
2. Implementing retaliatory measures, such as devaluing its currency and imposing tariffs on American soybeans, technology components, and industrial goods.

Given that the Chinese economy is largely state-controlled, it can absorb trade shocks more efficiently than the U.S., where companies face pressure to achieve short-term profits. If China escalates its countermeasures, it could lead to a restructuring of global supply chains and increased volatility in international markets.

6. Could these tariffs politically affect Trump?

• His core electoral base—workers in the industrial “Rust Belt”—supports these tariffs as a means to protect American jobs.
• However, if inflation rises and economic growth slows, Trump could lose support from suburban voters and the business sector.
• Typically, voters make decisions based on their economic self-interest—if tariffs lead to higher living costs, Trump’s popularity may decline.
• This appears to be a risky electoral gamble, as Trump seeks to energize his base without triggering an economic recession ahead of the elections.

6. How do these tariffs affect global economic stability?

• Trade disputes between the U.S., Canada, Mexico, and China increase uncertainty in global trade, raising risk premiums in international transactions.
• Currency markets are already reacting—investors are flocking to safe assets like gold and U.S. bonds, anticipating further trade disruptions.
• Restructuring global supply chains forces multinational companies to adjust their operations, increasing operating costs.
• Protectionist policies erode economic efficiency in the long run, potentially slowing global growth and increasing recession risks.

6. Could this lead to a full-scale trade war?

The situation seems to be heading toward a wide-ranging trade conflict. If Trump continues to impose more tariffs, other countries may respond with coordinated retaliatory measures. The greatest risk lies in escalation with China, which has the economic capacity to endure countermeasures for an extended period. A full-scale trade war could lead to:

• Rising interest rates
• Capital flight from emerging markets
• Decreased foreign direct investment (FDI)

In the end, Trump’s aggressive policies could inflict long-term damage on American businesses, posing significant economic challenges for the United States.