Trump says he’s prepping for ‘WAR’ with China as he takes huge economic gamble

President Donald Trump gave another justification for his tariff hikes, saying products need to be made in the USA in case the country goes to ‘war.’ ‘We’re going to have our drugs made in the United States, so that in case of war, in case of whatever, we’re not relying on China and various other countries, which is not a good idea,’ Trump told reporters on Air Force One Sunday evening. Trump has sparked fears of a recession with his crackdown on foreign imports as part of his campaign to products made in America, arguing he wants to support and ramp up manufacturing in this country.

| Published May 6, 2025

President Donald Trump’s administration has intensified its economic policies, marked by aggressive tariffs and significant fiscal changes. These moves have sparked widespread debate among economists, business leaders, and policymakers, as the nation grapples with the implications of a protectionist agenda.

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A Surge in Tariffs and Trade Tensions

President Trump’s second term has seen a dramatic escalation in trade protectionism. In April, the administration declared a “Liberation Day,” introducing sweeping tariffs under the International Emergency Economic Powers Act. These measures included a 10% baseline tariff on all imports, with specific rates soaring to 245% on Chinese goods, 100% on foreign-produced films, and significant hikes on imports from the European Union, Japan, and other nations .

The immediate economic fallout was palpable. Major stock indices plummeted, with the S&P 500 entering correction territory. Federal Reserve Chair Jerome Powell cautioned that these tariffs would likely push inflation higher, complicating the central bank’s efforts to stabilize the economy .

Moreover, U.S. border towns, particularly those adjacent to Canada, have experienced economic strain due to retaliatory boycotts. In Point Roberts, Washington, for instance, businesses reported a 30% decline in sales as Canadian shoppers stayed away in protest .

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Fiscal Policy Shifts and Tax Reforms

Parallel to trade measures, the Trump administration has pursued significant fiscal policy changes. A recent poll indicates that over 80% of voters support extending the 2017 tax cuts, which are set to expire at the end of the year . To address the potential increase in the federal deficit, estimated to rise by over $4 trillion over the next decade, Republicans have proposed cuts to social programs, including Medicare and Medicaid .

Additionally, the administration has resumed involuntary collections on federal student loan debt for approximately 5.3 million borrowers in default. This move ends a pause that had been in place since the onset of the COVID-19 pandemic, signaling a shift towards stricter enforcement of debt repayment .

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Business Community’s Response

The business sector’s reaction to these policies has been mixed. At the 2025 Milken Institute Global Conference, Treasury Secretary Scott Bessent defended the administration’s approach, urging critics to “never bet against America” and predicting a “Golden Age” of economic prosperity driven by trade reforms and deregulation .

However, many industry leaders expressed concern. Executives from major firms like Citadel and Apollo warned that the sudden imposition of tariffs could disrupt investment decisions and harm businesses. E-commerce entrepreneurs, such as Cuts Clothing CEO Steven Borrelli, cautioned that abrupt policy changes might force companies out of business due to lack of preparedness .

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Here are the pros and cons of President Trump’s 2025 economic policies, particularly focusing on aggressive trade tariffs and fiscal reforms:

PROS:

1. Strengthens Domestic Industries:

   • High tariffs on imports are designed to protect and revive U.S. manufacturing by making foreign goods less competitive.

2. Reduces Trade Deficits:

   • Targeted tariffs, especially on China, aim to rebalance trade relationships that the administration views as unfair to American businesses.

3. Stimulates Economic Nationalism:

   • Promotes a “Buy American” ethos, which could drive investment back into the U.S. economy and foster job creation in key sectors.

4. Tax Cuts Remain Popular:

   • Over 80% of voters support extending the 2017 tax cuts, which may boost consumer spending and small business growth.

5. Signals Strong Leadership:

   • The administration’s bold and unapologetic moves project a decisive stance on U.S. sovereignty and economic independence.

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CONS:

1. Inflationary Pressure:

   • Tariffs increase the cost of imported goods, contributing to inflation—a challenge already noted by the Federal Reserve.

2. Stock Market Volatility:

   • Sudden policy shifts and trade wars have spooked investors, with the S&P 500 entering correction territory and business confidence shaken.

3. Retaliatory Trade Actions:

   • U.S. border towns report economic damage from foreign boycotts, especially from Canadian consumers responding to U.S. tariffs.

4. Strain on Low-Income Americans:

   • Higher prices on everyday goods disproportionately affect working-class families, many of whom rely on imported products.

5. Cuts to Social Programs:

   • Proposals to fund the tax cuts by slashing Medicare, Medicaid, and other social services could hurt vulnerable populations.

6. Business Uncertainty:

   • CEOs and entrepreneurs warn that unpredictable policies make long-term planning difficult, potentially stifling innovation and investment.

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Conclusion

President Trump’s 2025 economic agenda—centered on sweeping tariffs and bold fiscal reforms—represents a high-stakes gamble aimed at reviving American industry and asserting trade dominance. While supporters applaud the push for economic self-reliance and the continued popularity of tax cuts, the rapid implementation of these policies has introduced significant uncertainty. Rising inflation, market instability, and strain on working families and small businesses underscore the risks of such an aggressive approach. As the administration charts this confrontational course, the long-term effects will depend on whether the promised economic “revival” can outweigh the immediate costs to American households and global trade relationships.

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SOURCES: DAILYMAIL ONLINE – Trump says he’s prepping for ‘WAR’ with China as he takes huge economic gamble

THE NEW YORK POST – Wall Street telling clients to prepare for the worst that might be coming from Trump’s tariff war

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