Navigating “Trumponomics” is marked by extreme unpredictability, says Trinh Nguyen, senior economist at Natixis. But there’s one thing we can count on: tariffs.

“Tariffs are here to stay; that’s the only certainty amid rising uncertainty,” she told NPF International Trade Reporting fellows.

“Trump likes tariffs,” and there are several ways he employs them as a tool to achieve his goals, Nguyen said.

There are country-specific tariffs as imposed on China. These tariffs can take a long time to implement. And, Nguyen points out, in Trump’s first term, China was able to “diversify, reshuffle and still find goods in the U.S. anyway through other countries.”

Therefore, because international trade is a global system, Trump also has imposed broad reciprocal tariffs. Negotiations are underway to shape percentages, exceptions and deadlines.

Nguyen says that Trump is now studying sectoral tariffs on specific product groups like pharmaceuticals, timber, shipbuilding or seafood.

“Watch out, they’re coming. They will really change the world. Things are very linked,” she said.

Commercial shipping is also affected. China, South Korea and Japan dominate the industry and ownership of major ports, including the Panama Canal, is in flux. If these ports become American-owned, “it’s going to be absolute mayhem in global trade,” Nguyen says. “Why? Because the very thing that carries your good, if the cost goes up, it can really rip the fabric of global trade.”

For Trump, ‘Slightly Successful’ Will Work

Trade negotiations will have a huge impact in the region, but Nguyen thinks Asian countries don’t have much leverage as they face U.S. tariffs. She says Trump aims to rein in the U.S. as the major source of growth as he reduces imports. “But there’s a huge problem with this,” Nguyen says. “If the U.S. is the largest importer of goods, $4.1 trillion, where are we going to sell more?”

There is a call for diversification in Asia, but where to sell? “Now everyone is trying to sell everywhere else with a shrinking pie.” There is more competition and the margins are being squeezed.

To achieve the overall economic aims of tariffs, Nguyen points out, “Trump doesn’t have to be a hundred percent successful, he just has to be slightly successful.”

Trump and Xi Jinping Alike

“To analyze Trump, you have to ask what does he want and how is he going to get it? And most people say he doesn’t know what he wants.” But Nguyen says that’s not true – Trump has strong convictions about manufacturing and the economy that can be traced back decades.

“Trump and Xi Jinping are very similar. They care about the physical economy and particularly the manufacturing sector. Within the manufacturing sector, the industrial sectors – the sectors that are tied with security, steel and rare earth metals.”

Trump believes that the economy’s foundation is the “real economy” versus the financial system’s stocks, Treasuries, or corporate earnings. The president’s focus on manufacturing is a “total disconnect” with the U.S.’s highly financialized system. U.S. manufacturing has shrunk significantly, whereas the financial, service and tech sectors are doing well.

Nearshoring and Onshoring

Nguyen thinks that in a shift from globalization, supply chains will become consolidated and regionalized. A car manufacturer may import fewer parts because if they pay 25% tariffs, it is preferable to take on the whole supply chain and pay tariffs only on the final product. There may be expansion of trade in a regional free trade area, but at the point of sale, supply chains will be shorter through nearshoring or onshoring.

The deepening regional supply chains and shrinking global supply chain are not a disruption, Nguyen says, but a rearrangement. Trade will flow a bit differently. In Asia, fewer supply chains will center in China, with more spread throughout the region.

This fellowship is part of an ongoing program of journalism training and awards for trade coverage sponsored by the Hinrich Foundation. The National Press Foundation is solely responsible for the content. All programs are on the record. Resources and transcripts are available to journalists worldwide.