Is Donald Trump Winning the Trade War?

By any measure, the trade policy of the second Donald Trump administration surprised many. April 2, 2025, so-called Liberation Day, would not be forgotten easily. On that day, President Trump signed two executive orders and announced a long list of unilateral across-the-board tariffs involving all countries. In the terminology of the executive order, the “reciprocal” tariffs were primarily intended to “rectify trade practices that contribute to large and persistent annual United States goods trade deficits.” No country escaped higher tariffs; even those that ran bilateral deficits with the United States were subject to a 10% levy. What to make of these drastic policy announcements that introduced a period of unprecedented policy uncertainty in the United States? This case brings in a new geoeconomic perspective, and explicitly ties in the work of Albert Hirschman, arguably the founder of this field that links international economics and international relations (power). At the University of Virginia Darden School of Business, this case is taught in the “Managing International Trade and Investment” MBA elective. It can also be taught on its own or as part of a mini-module on trade policy along with related cases and technical notes. It is critical, however, that this case be taught together with the following technical note: Peter Debaere, “National Power and the Structure of Foreign Trade and the New Geoeconomics,” UVA-GEM-0253. The note provides a framework, grounded in geoeconomics and Hirschman’s pioneering work, that will give students a new way to think about US trade policy.