Donald Trump’s ‘three-strand’ tariff strategy explained as top economist predicts president will make another strict demand

Shankar Singham discusses Donald Trump's tariffs - WATCH
GB NEWS
Ben Chapman

By Ben Chapman


Published: 07/04/2025

- 18:21

Shankar Singham outlined how the US president's approach encompasses revenue-generating tariffs

Top economist Shankar Singham has provided a detailed analysis of Donald Trump's controversial tariff strategy, dividing it into three distinct strands.

Speaking on GB News, Singham outlined how the US president's approach encompasses revenue-generating tariffs, early-stage tariffs for non-trade purposes, and unfair trade reciprocal tariffs.


This analysis comes just days after Trump signed an executive order imposing a 10-percent "minimum baseline tariff" on imported goods, with higher rates for certain trading partners.

The move has sparked widespread opposition from economists worldwide.

Shankar Singham and Donald Trump

Singham explained Trump's decision on GB News

GB NEWS

Singham explained that revenue-generating tariffs are based on the administration's belief that "this would be a good thing to do" for their own sake.

Early-stage tariffs target non-trade issues like "the fentanyl issue in Canada and Mexico" and "tend to either never be imposed or they're very short-lived".

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The third strand, unfair trade reciprocal tariffs, was demonstrated in Trump's recent announcement and is "based on what other countries are doing to the US".

Singham emphasised the importance of examining these three categories separately to understand Trump's overall strategy.

"He's making the argument that we need to do something different," Singham told Michael Portillo on GB News, referring to Trump's approach to trade negotiations.

The economist highlighted Trump's fundamental distrust of traditional trade agreements, noting: "He will say, 'I don't believe you. For 30 years we signed deals and nothing happened.'"

Instead, Trump will demand concrete actions before entering negotiations.

"He won't necessarily do this in the form of a deal without some form of down payment... Show me what you're actually going to do and then we can start talking," Singham explained.

Trump's executive order outlines varying tariff rates for different countries, with China facing 34 percent, the European Union 20 percent, and Vietnam 46 percent.

Other nations will also see significant tariffs, including Japan at 24 percent, India at 26 percent, and Cambodia at the highest rate of 49 percent.

The White House document indicates that certain goods will be exempt, including steel, aluminium, pharmaceuticals, and semiconductors.

For Canada and Mexico, goods compliant with the United States-Mexico-Canada Agreement will continue to see zero tariffs.

Critics warn that Trump's tariff strategy could have significant economic consequences despite his claims it will boost domestic manufacturing.

Gary Clyde Hufbauer, a fellow at the Peterson Institute for International Economics, told Xinhua: "There is no basis for the claimed tariff-equivalent rates imposed by other countries. This is pure invention."

Economists have cautioned that the measures will increase prices for American consumers and businesses.

The tariffs could potentially disrupt global trade and push the US economy towards recession, with Hufbauer suggesting world growth could decline by "1 percent or more".