Trump threatens tariffs on China, Spain as global trade tensions escalate

In a series of developments highlighting the ongoing global trade tensions, US President Donald Trump has threatened to impose tariffs on Spain, following the country’s refusal to increase its defense spending to 5% of its GDP. This move comes amidst a backdrop of escalating trade disputes involving multiple countries, with significant implications for the global economy.

Trump’s Tariff Threat Against Spain

On October 14, Spanish Prime Minister Pedro Sánchez reiterated his country’s stance against increasing defense spending to 5% of GDP, a requirement set by NATO. In response, Trump expressed his dissatisfaction, stating, “They are the only NATO country that hasn’t increased defense spending to 5%. Spain is doing well with our support, so I’m very unhappy. I’m considering trade punishment through tariffs.”

Nobel Laureate Criticizes US Tariffs on Brazil

Earlier on October 14, Paul Romer, the 2018 Nobel Prize winner in Economics, criticized the US tariffs on Brazil during a speech in São Paulo. Romer argued that the tariffs imposed by Trump were an attempt to influence the trial of former Brazilian President Jair Bolsonaro, which he said violated Brazilian sovereignty and the rights of its people. He warned that the uncertainty caused by US tariff policies, along with overinvestment in artificial intelligence, could push the US economy into recession. Brazil has been hit with a 40% tariff on its exports to the US, with many products facing a 50% tariff rate.

US Threatens 100% Tariffs on Chinese Goods

The same day, the US Trade Representative hinted at the possibility of imposing a 100% tariff on Chinese goods as early as November 1, contingent on China’s actions regarding the rare earth dispute. In response, Chinese Foreign Ministry spokesperson Lin Jian emphasized that China’s export control policies are aimed at maintaining world peace and fulfilling international obligations. He criticized the US for using both negotiation and threats simultaneously, urging the US to correct its approach and engage in dialogue based on equality and mutual respect.

US Treasury Secretary Signals Easing Tensions

Despite the threats, US Treasury Secretary Benson recently claimed that the situation with China had “significantly eased” and that the 100% tariff might not be implemented. This back-and-forth has been a hallmark of US-China trade relations, with both sides maintaining communication through working-level talks. China’s Ministry of Commerce reiterated its stance that it is ready to negotiate but will also fight back if necessary.

Impact of Tariffs on the Global Economy

The ongoing tariff wars have had far-reaching effects. According to Goldman Sachs, US consumers are increasingly bearing the brunt of tariff costs, with projections indicating that they could shoulder up to 55% of the tariff burden by the end of the year. This has contributed to rising inflation and economic uncertainty.

At the recent K fair plastics and rubber trade show in Dusseldorf, Germany, industry leaders criticized US tariffs for disrupting global supply chains and weakening market confidence. The International Monetary Fund (IMF) also warned in its latest World Economic Outlook report that tariffs are undermining global growth prospects, despite a slight upward revision in its growth forecast for 2025.

Allslot's View

As trade tensions continue to escalate, the global community is increasingly concerned about the potential for further economic disruption. While some policymakers seek to use tariffs as leverage, others warn of the long-term damage to international cooperation and economic stability. The coming weeks will be crucial in determining whether dialogue can prevail over threats and whether a more stable trade environment can be restored.

A trade war is essentially a negative-sum game of mutual punishment through tariffs and barriers. Its core logic lies in the attempt by all parties to safeguard their own interests through protectionist measures, ultimately leading to systemic disruption of global industrial chains and collaborative systems. In the short term, both initiating and responding countries face direct impacts such as rising import prices, higher production costs for businesses, and increased burdens on consumers. In the long term, the stunted channels for technological innovation and cooperation, the decline in market confidence, and the reduced efficiency of the international division of labor will further undermine the economic growth potential of all parties involved. More far-reaching implications lie in the fact that trade confrontation will spread to other areas such as investment, technology, and geopolitics, creating a vicious cycle of "prisoner's dilemma" that leaves no side immune. Ultimately, the mutual losses undermine the strategic shortsightedness of "killing one thousand enemies while injuring eight hundred of one's own." Therefore, trade wars not only fail to truly resolve existing economic contradictions, but will instead create more structural crises, proving their essence to be a collective self-inflicted wound with no winners.