Trump 2.0 spells trouble for U.S. allies as he doubles down on tariffs

Donald Trump, who has been doubling down on his tariff-heavy trade policy, appears to have shifted the focus of his protectionist agenda from China to some of the closest U.S. allies.  

Speaking at a campaign event in Savannah, Georgia, on Tuesday, the Republican presidential nominee said he would build upon the tariff policies of his first term in an effort to take manufacturing jobs from foreign countries — both friends and foe. 

“You will see a mass exodus of manufacturing from China to Pennsylvania, from Korea to North Carolina, from Germany to right here in Georgia,” he said in his mostly economic-centered speech. 

“I want German car companies to become American car companies, I want them to build their plants here,” he added. 

In his first term, Trump had imposed billions of dollars worth of duties on Chinese goods as part of efforts to rectify what he saw as an unfair trade balance. Trump has said he would consider new tariffs on imports from the country at rates of 60% or higher.

U.S. allies could become a key target of Trump’s “America First” policy that is increasingly grouping European and Asian partners alongside rival China. The former President has proposed blanket tariffs as high as 20% that would hit imported good from all countries.

“We have been treated so badly, mostly by allies … our allies treat us actually worse than our so-called enemies,” Trump said at a rally in Wisconsin earlier this month. 

“On military, we protect them and then they screw us on trade. We’re not going to let it happen anymore. We’re going to be a tariff nation,” he added. 

The comments echoed statements Trump made about Taiwan earlier this year when he accused it of taking “about 100%” of U.S. chip business. He also said that the democratically governed island should pay the U.S. for its defense. 

Trump has long sought to place economic and diplomatic pressure on U.S. allies, accusing them of “free-riding,” and his recent statements signal he’s doubling down on that approach, said Nick Marro, Lead for Global Trade at Economist Intelligence. 

Experts have said that Japan is also worried about what could be another “transactional” Trump Presidency and his mentions of 100% tariffs on certain car imports. “Will that include Japanese automakers? So there’s a lot of uncertainty here at the moment about what the next five years could look like,” author William Pesek told CNBC’s “Squawk Box Asia” in July.

“One of the riskiest aspects of Trump’s proclivity towards tariffs is that other countries won’t take these actions sitting down. Retaliation by other U.S. trade partners — whether that be via reciprocal, retaliatory tariffs, or other non-tariff measures — is a potential consequence of all of this,” Marro said.

Trump also said on Tuesday…