In April 2025, President Donald Trump launched an aggressive trade policy, imposing sweeping tariffs that have sent shockwaves through the global economy. These measures, aimed at protecting American industries, have led to significant economic disruptions, prompting questions about the future of global trade and the potential rise of new economic powers.
The Global Economy in Turmoil
Economic Impact of Tariffs
Trump’s tariffs, including a 145% levy on Chinese goods and a 25% duty on steel imports, have had profound effects:
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U.S. Economy: The Penn Wharton Budget Model projects an 8% reduction in GDP and a 7% decrease in wages, with middle-income households facing a $58,000 lifetime loss .
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Global Trade: The World Trade Organization estimates that trade between the U.S. and China could decline by up to 80% due to these tariffs .
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Oil Industry: U.S. oil producers are experiencing a 15% drop in crude prices since April 2, 2025, alongside increased costs for materials like steel, leading to reduced drilling activity .
Winners and Losers in the Trade War
China’s Strategic Position
Despite facing high tariffs, China has managed to maintain a trade surplus with the U.S.:
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Export Surge: China’s exports rose 12.4% in March 2025, with a $76.6 billion trade surplus in the first quarter .
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Diversification: China is redirecting exports to Europe and Southeast Asia, with exports to Southeast Asia increasing by nearly 17% .
Impact on Other Economies
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European Union: The EU faces concerns over market flooding from redirected Chinese goods, particularly in sectors like solar panels .
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Southeast Asia: Countries like Vietnam and Malaysia are cautiously engaging with China, balancing economic opportunities against potential overreliance .
The Need for a New Economic Order
Progressive International’s Program of Action
In response to the global economic instability, the Progressive International has proposed a Program of Action for a New International Economic Order, focusing on:
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Climate: Advocating for environmental justice and climate reparations.
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Industry and Finance: Promoting equitable trade structures and financial sovereignty.
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Technology and Governance: Encouraging public digital infrastructure and inclusive governance .
China’s Role in Shaping the Future
China’s strategic moves suggest a potential leadership role in a new economic order:
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Infrastructure Investment: President Xi Jinping’s diplomatic tour in Southeast Asia aims to strengthen regional ties and offer economic support .
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Trade Realignment: China’s efforts to diversify export markets and invest in neighboring countries indicate a shift towards a more China-centric trade network.
President Trump’s aggressive tariff policies have disrupted the global economy, highlighting the vulnerabilities of the current trade system. As nations grapple with these changes, there is a growing impetus to establish a more equitable and sustainable economic order. China’s strategic positioning and initiatives like the Progressive International’s Program of Action may pave the way for a reimagined global economic landscape.
References
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Penn Wharton Budget Model. (2025). The Economic Effects of President Trump’s Tariffs.
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Reuters. (2025). China’s March exports likely got front-loading lift before Trump’s new tariffs.
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Business Insider. (2025). US tariffs could give the EU exactly what it doesn’t want: even more Chinese products.
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The Australian. (2025). Xi drops in to charm neighbours.
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Progressive International. (2024). Program of Action on the Construction of a New International Economic Order.
