Hello, friends! One foolish politician, can spell devastation for the entire world, and we are witnessing this currently. On 2nd April, 2025, Donald Trump announced his presidential tariffs. He imposed tariffs on more than 90 countries and in his typical, dramatic way, he said, No more. "Many countries have ripped us off left and right." In his opinion, the rest of the world have been looting America for a long time. America, the richest country in the world. Was being ripped off by the rest of the world. "But now, it's our turn, to do the ripping." Once he announced this, share markets all over the world crashed. Within a week, trillions of dollars were lost and the world is in danger of a global recession. "The world taters on the edge of a potential global recession." Monday, 7th April, was the worst day for the stock market. Whether in Hong Kong or Taiwan, China or Japan, Germany or the UK, the US or our India, the stocks market fell drastically everywhere. The strange and childish way that things have been handled here can be seen from this example. On 2nd April, Donald Trump imposed a 34% tariff on China. 2 days later, in response to this, China imposed 34% tariffs on America. Trump did not like this, so he told China to withdraw their newly imposed tariffs. If they don't, he said that he will impose another 50%. "If the tariff isn't removed by tomorrow at 12 o'clock, we're putting a 50% tariff on above the tariffs that we've put on." But China is adamant on its stance. And on 9th April, America imposes a further 50% tariff on China. And in response to this, China imposes another 50% tariff on America. And so, these two countries are engaged in a game of tit-for-tat. This trade war is hidden from no one. Come, in this video, let's understand this situation properly. Before beginning this video, I'd like to inform you spots are now open for my this month's AI Masterclass. I conducted this 2.5-hour-long live workshop last month too. For this, I come live personally to teach you about more than 20 AI tools. Including ChatGPT, DeepSeek, Midjourney, Leonardo AI, DreamStudio, Runway ML, ElevenLabs, and many new Chinese AI tools, Hailou AI, Kling AI, using AI for image generation, video generation, website building, audio generation, generating songs, and you'll learn about many more use cases. Those who attended this AI Masterclass last month, have left these reviews that you can see on the screen. This is an amazing and affordable opportunity, to upskill youself in AI, because it costs as little as 2 movie tickets. If you couldn't join it the last time, join this one, The link is in the description and this QR code. The exact date and time is mentioned in this link. In case you cannot attend it on this date and time, you can watch the recording of this workshop for the next 3 days. Now, let's get back to our topic. Let's begin with the basics, friends. What is a tariff? A tariff is a type of tax. This tax is imposed on goods imported from abroad. For example, if you buy a smartphone made outside India, like an iPhone in India, then a 15% import tax is imposed on it by the Indian government. Import tax is a type of tariff. Things like clothes attract a 20-25% import duty. Import duty is also a type of tariff. There are mainly two reasons behind imposing tariffs. First, to boost the government's revenue. Like the other taxes, this is a source of government's income. And the second reason is to protect local industries. Since by imposing tariffs, goods imported from foreign countries become expensive, and the domestically produced goods remain comparatively cheaper. So people are incentivised to buy more of the domestic products. That's how local industries get an advantage. Many countries impose tariffs because of this. And there's nothing wrong with this. In fact, if tariffs are imposed smartly, then it helps the country's economy. For example, take South Korea. There, during the 1980s and 1990s, the farmers were facing a lot of difficulties. The farmers didn't have access to modern technology. So the prices at which they could sell their rice in their country, was much higher than the cost of imported rice from America, Thailand, and Vietnam. So to protect the livelihoods of South Korean farmers, South Korea imposed tariffs strategically. They imposed a limit, upto which rice could be imported into their country, without any tariffs. But if the import of rice exceeded that limit, it'd be subjected to high tariffs. As high as 500% or more. Consequently, the imported rice became more expensive and South Korean farmers could get the opportunity to remain competitive. Gradually, they began using modern technology, in sync with the government spending on rural infrastructure and education. A few decades later, when the efficiency of these farmers were at a global level, they gradually removed the tariffs. Now think about it, had there not been any tariffs here, how would it have impacted these farmers? The local farming sector would have been destroyed and there would've been large-scale poverty and unemployment. This proves that tariffs aren't a negative step in and of itself. So the question here is how are the tariffs imposed? On which things? And on which countries. Because think about things from a different perspective. From the perspective of the country which exports its goods to another country. Suppose that India exports a lot of medicines to South Korea. So much so that South Korea becomes the largest consumer of Indian medicines. And one day, suddenly, South Korea imposes a 100% tariff on the medicines imported from India. South Korea wants to promote its domestic medicine industries. How would India feel in this situation? India won't be happy at this. Especially if South Korea is the biggest consumer of Indian medicines. Because India's domestic industry would be destroyed if their medicines stop selling in South Korea. This is why when a country imposes tariffs to protect its local industry, it can be damaging to other countries. There are many cases where the exporting country doesn't like it so it retaliates and imposes tariffs on the first country. This is how a tariff war starts. It can also be called a trade war. A simple way to avoid this is to negotiate with the other country. Talk to the other country to explain the problem which makes it necessary for you to impose higher tariffs. And if the other country sympathises with the situation, the two countries might be able to come up with a mutually beneficial agreement. You might agree to have tariffs imposed on your exports, but you can negotiate a limit, so that you can still sell a large chunk of your products in their country. Friendly negotiations. That is crucial. Donald Trump did not consult anyone, and imposed tariffs on 90 countries out of nowhere. That too with such an attitude. Practically saying that he'd do whatever he wants to. "We're gonna have to go through a little tough love, maybe." "They all understand." "They're ripping us off and they understand it." Obviously, many countries weren't happy about this and they started imposing retaliatory tariffs. On his part, Donald Trump said that he imposed tariffs to reduce America's trade deficit. That's why, on the day he imposed tariffs, he named it the Liberation Day. Now, if you want to ask what is a trade deficit, let's take the example of two countries. One is America and the other is China. Assume that the total goods exported by America to China is worth $1 billion. And the total goods exported by China to America is worth $2 billion. So here, expenses minus revenue, America's trade deficit is at $1 billion. [$2 billion minus $1 billion] The difference between export and import. Now, being in a trade deficit isn't inherently wrong. Roughly speaking, it is said that trade deficit is bad because your country depends a lot on another country. But if your country's economy is strong, and your country receives a large amount of foreign investments, and you don't depend on another country for something critical, in such cases, being in a trade deficit won't be bad. But Trump thinks that America's trade deficit is detrimental. And to get out of this trade deficit, he claims to have imposed these tariffs. And to impose these tariffs, he went as far as to use the emergency powers. I am not kidding! He declared being in a trade deficit to be a national emergency. "A very national emergency that threatens our security, and our very way of life." Experts say that misusing the Emergency Act like this isn't right in a democracy. But come, let's take a closer look at the tariffs imposed by Trump. Donald Trump stood there with a big board that had the tariffs for different countries. Every foreign good imported into America got at least a 10% tariff. This 10% tariff has also been imposed on those countries with whom America isn't even in a trade deficit. Trump even used the excuse that because some countries impose tariffs on goods exported by America, the tariffs imposed by Trump, should actually be considered reciprocal tariffs. "Reciprocal, that means they do it to us, and we do it to them." Look at the list here. 49% on Cambodia. 46% on Vietnam. A 20% tariff on the European Union. 32% on Taiwan. 25% on South Korea, 26% on India, and 17% on Israel. After the tit-for-tat game with China, the final tariffs on China have reached 125%. On the other hand, China retaliated with 125% tariff on America. It's interesting to see how these exact numbers were calculated. A simple formula was used here. They took the trade deficit of any country with America and divided it by the imports coming from that country. And half of the resulting percentage became the new tariff to be imposed on that country by Trump. "And because we're being very kind, we will charge them approximately half of what they are happy to be charging us." For example, America has a trade deficit of $295 billion with China. And the American goods imported by China are worth $439.9 billion. According to the formula, the percentage here is 67%. The trade deficit between the two countries is 67%. But here, Trump said something stupid. Trump said that this 67% is the rate of tariff which China imposes on American goods. Not true at all. He claimed this was the Chinese tariff, and imposed a tariff of half of it at 34%. They did this to every country. I don't understand how no one around Trump noticed this. This formula can be understood by primary school kids too. But no, Trump crossed all the limits of stupidity when he imposed tariffs on some uninhabited islands near Antarctica. Heard Island and McDonald Island are some islands near Antarctica. No humans live there. No human has even gone there in the last 10 years, There are only penguins on that island. But now Trump imposed a 10% tariff on these islands as well. Let's check out how the penguins reacted to Trump's announcement. No, seriously, these islands are so isolated that you'd need to take a 2-week-long boat journey from Australia, and no human has undertaken this journey in the last 10 years. Could it be that when Trump saw that this island was called McDonald Island, he considered it to be some sort of McDonald's Disneyland. Anyway, jokes aside, these tariffs have a real impact. America is a huge consumer market. Small and big businesses all over the world depend on selling their products to American consumers. That's why many countries imposed retaliatory tariffs to fight against America. China, the European Union, and Canada deliberately targeted those places in retaliation from where Trump gets the most votes in America. China targeted corn farmers and car makers. Canada imposed tariffs on poultry farms and AC manufacturers. Europe imposed tariffs on steel mills and slaughterhouses. These are the sectors that have the most number of people who support and vote for Trump. Their logic is simple. If they want to make a real impact, they need to affect those people who voted for this stupid politician. "Trust me, I'm like a smart person." Actually, imposing such tariffs on so many countries, all of a sudden, without talking to them, will definitely cause harm. And both sides will suffer. The country from where you import goods the businesses of that country would be affected. People will buy fewer goods. But in your own country, when foreign goods get expensive, and not just a few things, but when almost everything gets more expensive, the brunt of it all will be borne by the common man's pockets. Trump's tariffs would affect Americans the worst. Because today, we live in a globalised world. The goods sold in America, in most cases, they are either made abroad entirely, or its small components, raw materials or ingredients are imported from abroad. Take Mr Beast's example. And the chocolates he sells. He tweeted that although it is made in America, but the cacao beans used in the chocolate are imported. Mostly from African countries. With the increase in tariffs, it'd be more expensive to import the raw materials, and it will make the chocolates more expensive. That's why he tweeted that after these tariffs, it would actually be cheaper to make these chocolates outside the US. If we look at history, every time America has imposed tariffs like this without thinking it through, broadly speaking, in many aspects, and in many countries, America was the one to suffer the losses. In 1789 the first American President, George Washington brought the Tariff Act. As per which there was a 5% tax on imported goods. But in 1890, tariffs were increased at a large scale. More than 1,500 goods were taxed at 49.5%. William McKinley was responsible for these increased tariffs. Also known as Napoleon of Protectionism. Trump considers him a hero. "I'm a fan of William McKinley." But do you know what happened because of these tariffs? In 1893, there was a depression in America. Unemployment reached 25%. After 1910, the Democrats came into power. They supported free trade. Once they lowered the tariffs there was rapid economic growth in America. But in 1920, the Republican Party came into power again. And to protect the farmers and industries, tariffs were raised once again. Then in 1930, Republican President Herbert Hoover brought the Smoot-Hawley Tariff Act. Under this, in about every sector, the tariffs were increased by 20% or more. And what happened after this? The other countries weren't happy with this. Those countries retaliated. Imposed retaliatory tariffs. And after that, international trade declined worldwide. Between 1929 and 1934, global trade decreased by 66%. In 1929, there was the Great Depression. Though, it was caused due to other reasons, the situation only worsened, and for that, the blame lies with these tariffs. For about 10 years, the American and global economies remained stuck. And it was only in 1939 once the Second World War began. that factory production picked up in America, and America could finally come out of this depression. Since the Second World War, America has always encouraged free trade. It has always told other countries to keep their tariffs as low as possible. The lower the tariffs, the more international trade there will be. And every country stands to benefit from this. Based on this philosophy, the WTO or the World Trade Organisation was formed. It became a platform for negotiation for the whole world. Even now, if you go to the WTO's Wikipedia page, you will see a Purpose section. Let's read that. "Reduction of tariffs and other barriers to trade." The WTO was formed with the aim to reduce tariffs all over the world. In the establishment and promotion of this international organisation, America played a leading role. But now, after Donald Trump's presidency, everything has turned upside down. Other countries aren't sure how much they can trust America. What does America actually believe in? The Prime Minister of Singapore gave an interesting statement about this. Listen to this. "Trade war escalated to armed conflicts and eventually the Second World War." He states that the last time there was a trade war on such a large scale, it caused armed conflicts which eventually resulted in the Second World War. It's getting more and more difficult to predict what will happen next. The global economy is going through quite an unpredictable time. And Donald Trump's behaviour is responsible for this unpredictability. On the night of 9th April, the news broke that Trump has paused tariffs on all countries for 90 days. And has reduced them to only 10%. Except for China. Tariffs on China have been increased further. "I did a 90-day pause for the people that didn't retaliate. That's what I did with China. Because they did retaliate." The rates of tariffs are fluctuating each day. And people are confused. What is Trump trying to do? Friends, what do you think? Comment below to let me know. Perhaps even Trump won't know the right answer to this. Because perhaps he doesn't know what he wants to do. Some people have made accusations of stock market manipulation too. When he suddenly imposed tariffs, the stock market fell. But the day the tariffs were removed, that morning, before the tariffs were lifted, he tweeted this. "This is a great time to buy!!!" He knew that as soon as the tariffs would be lifted, the stock market would go up again. Here this post was meant to tell his followers, go and buy stocks. As soon as he announced the pause of the tariffs, the stock market suddenly shot up. This is a straightforward and clear proof of stock market manipulation. But the question arises, who will dare to investigate the American President? And even after investigating, the question is, is there a judge in America who will dare to pass a judgement against Donald Trump?