Trump playing "dangerous game" as tariff measures signal decline in U.S. dollar hegemony: economists

The universal "reciprocal tariffs" imposed by the United States signals a decline in the U.S. economic dominance and dollar hegemony, as the country is attempting to extract excessive financial benefits from its trading partners, according to economists, who warn the Trump administration is playing a "dangerous game".

U.S. President Donald Trump last week signed an executive order on the so-called "reciprocal tariffs," imposing a 10-percent "minimum baseline tariff" before unveiling higher rates on certain trading partners. The policy sent shockwaves throughout the global economy and triggered panic on financial markets, with analysts warning of significant risks and dire economic consequences.

In an interview with the China Global Television Network (CGTN), Hong Hao, chief economist of the GROW Investment Group, a Shanghai-based hedge fund, said the tariffs reflect Trump's strategy to extract economic benefits from trading partners, particularly viewing China as a significant competitor. "Trump really believes that the trade terms with the trading partners have been unfair to the U.S., and as a result, the U.S. manufacturing sector has been hollowed out. Therefore, the U.S. is paying an excessive price for globalization, and now, it's time to pay back. I think, from this angle, he is trying to extract economic rent from its trading partners, and also he is trying to see China as one of the major U.S. rivals at this juncture. So, I think, as a result, he is playing a very dangerous game. And, as you can see, it's political theater in the sense that he is trying to dramatize the extreme pressure, so that he can get excessive rent from the opponent," he said

Trump's unilateral imposition of tariffs has eroded global confidence in the U.S. and its dollar's status, leading many to state that the American hegemony may not persist, according to Josef Gregory Mahoney, a professor of politics and international relations at East China Normal University.

"The U.S. economy is at an inflection point. There is a moment where the previous strategies being used to sustain American hegemony were no longer working. And, it's only a matter of time before the U.S. position erodes, given the fact that it's been a house of cards built on the dollar supremacy. And a lot of people don't see that as having a brighter future. This has moved past the theater stage and has moved really directly into one in which no one really has confidence in the U.S. anymore. No one has confidence in the dollar. No one has confidence in the U.S. being committed to the multilateral system, to global trade and so forth and so on," he said.

Trump playing "dangerous game" as tariff measures signal decline in U.S. dollar hegemony: economists

Small- and medium-sized retailers across the United States "are getting hit the hardest" by disrupted supply chains, as U.S. tariff actions fuel market chaos and panic, a U.S. logistics industry insider based in China warned.

Sam Boyd, managing partner at Guided Imports -- a cross-border logistics company serving many American small businesses that rely on Chinese manufacturing -- told China Media Group (CMG) that the tariff policies introduced by the Trump administration have left many importers unsure about how to respond.

"Small- to medium-sized retailers and e-commerce companies, who are usually purchasing their goods close to when they're going out of stock, are getting hit the hardest. It's difficult for businesses to really understand what to do, so most of the businesses are just being forced to wait. And what they've learned over the last two-week period is that these escalations have no ceiling. The majority of our customers have opted to pause their shipments leaving from China. And the downside with this is that they're going to go out of stock," said Boyd.

According to the National Retail Federation (NRF), container imports to the U.S. are expected to fall by more than 20 percent year over year in the second half of 2025.

Boyd warned that the consequences of paused shipments could extend beyond inventory shortfalls, creating ripple effects that threaten port operations and U.S. domestic logistics.

"But there's an even more significant ripple effect that we're not quite aware of, which is: because so many businesses have chosen to pause their shipments and wait, we're creating a backup -- or a future backup -- that's going to be seen at U.S. ports. So let's say that there is going to be an event that solves this tariffs issue, and it's to everyone's liking enough that they can start placing orders again. By the time they all [those shipments] start arriving at the ports, it's going to create a surge. And this is going to create a surge in shipping costs, and it is going to create a surge in trucking within the U.S.," he said.

Boyd also questioned the U.S. government's repeated calls to bring manufacturing back home, arguing that such efforts are far from realistic given China's deep industrial capacity.

"The concept of reassuring is a very nice concept for those who are many degrees away from manufacturing. But China has so much experience with manufacturing that for any country -- whether it be the United States or one of China's neighbors that try to take over -- it's not going to be something that we can just flip a switch and all of a sudden, you know, a new country becomes the manufacturer," said Boyd.

Small-, medium-sized retailers "hit hardest" by U.S. tariff policy: logistics expert