Trade gambit: Donald Trump’s previous tariff barrage spooked markets. Will this time be different?

US President Donald Trump is once again escalating the trade war and shaking up the global economy with a sweeping new round of tariffs, this time convinced that the outcome will vindicate him. Just months after his earlier tariff push roiled markets and dented public confidence, Trump is forging ahead with duties as high as 50%, wagering that import taxes will drive US growth, not inflation or slowdown as many economists predict, according to news agency APTrump has sent letters to at least 14 countries announcing tariffs ranging from 25% to 40% on a wide array of goods, with copper and pharmaceutical imports facing new duties of up to 50% and 200% respectively. The deadline for these levies to take effect is August 1 and this time, Trump insists there will be no extensions. “There has been no change to this date, and there will be no change,” he posted on Truth Social.Unlike his “Liberation Day” tariff announcement in April, when abrupt visuals and unclear policy triggers spooked markets, Trump’s latest rollout uses formal letters, albeit riddled with odd formatting, as per AP. Still, the message is clear: there’s little room left for negotiation. “It’s a better way,” Trump told his Cabinet, referring to the letters. “You’ll pay 25%, 35%. We have some of at 60, 70.”The approach reflects Trump’s impatience with traditional diplomacy. “It’s too time-consuming” to negotiate, he claimed, calling past leaders “stupid” for not weaponising tariffs sooner. But this unconventional strategy is drawing warnings at home and abroad.Senator Ron Wyden criticised the uncertainty, saying the “TACO” pattern — “Trump Always Chickens Out” — has paralysed business leaders and foreign governments, unsure whether the threats will materialise. Economists also remain cautious. Cornell’s Wendong Zhang was quoted as saying by AP, “This remains one of the most aggressive and disruptive tariff moves in modern history.”Trump argues the new tariffs will rebalance trade and protect American jobs. “Every case I’m treating them better than they treated us over the years,” he said. Yet many of the targeted nations, including US allies like Japan and South Korea, are scrambling to respond. Some smaller trading partners, such as Tunisia and Laos, have expressed confusion over their inclusion.Despite the sweeping policy shift, markets have so far shown restraint. The Dow Jones dipped 0.4% on Tuesday, and the S&P 500 slipped 0.1%. As per news agency AFP, analysts say investors are adopting a “wait and see” stance, unsure whether this will be another bluff or a full-scale trade war.The stakes are high. The White House projects tariff revenues could top $300 billion this year, according to treasury secretary Scott Bessent, far above the $2.8 trillion 10-year estimate from the Congressional Budget Office. As of June, $98.2 billion has already been collected, according to the Bipartisan Policy Centre.