Trump's Press Conference Exposes Deeper Cracks

Trump says "everybody wants to trade with America." He forgot to ask the small businesses already paying the price.

Dulam Harshita Sai | The Moscow Times

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Donald Trump's recent press conference on trade policy revealed a troubling disconnect between his tariff objectives and their real-world effects on businesses navigating fragmented global markets. Trump defended tariffs as generating substantial revenue for the American economy while protecting domestic industries from what he characterized as "cheap, low-quality" Chinese

goods, arguing these measures benefit consumers by shielding American businesses from unfair competition.

Yet when pressed on implementation details, specifically how tariffs affect U.S. consumers versus Chinese manufacturers, responses grew less specific. Trump acknowledged uncertainty about mechanisms, stating, "I'm not entirely sure what they are," before returning to broader claims about protecting American businesses. This exchange illustrated a recurring pattern: policy goals often outpace detailed economic modeling of costs and benefits.

More significant gaps emerged when questions turned to effects beyond U.S. borders. When asked whether tariff escalation might impact allied economies or destabilize Middle Eastern partners dependent on stable trade flows, Trump emphasized diplomatic relationships rather than addressing the economic spillover question directly. He stated that tariffs "don't affect other countries" due to existing trade agreements, a claim that overlooks how integrated global supply

chains have become.

What gets lost in this rhetoric is the disproportionate burden on small and medium enterprises. Unlike multinational corporations with diverse supplier networks and capital reserves, smaller businesses cannot easily absorb sudden cost increases. Research shows that over 45% of small businesses affected by 2025 tariffs expect cost impacts lasting longer than a year. A footwear

company CEO had to take out a $250,000 loan just to pay a tariff bill on one container of shoes from India. These aren't abstract policy debates; they're existential threats to operations.

Consider the practical situation facing manufacturers in emerging markets. Many rely on Chinese intermediate goods not primarily for cost alone, but because these supply chains offer reliability, scale, and established logistics networks. When tariff disputes disrupt pricing predictability or availability, these businesses face difficult choices. Small businesses face a financing gap of $5.7 trillion globally, leaving them ill-equipped to weather trade disruptions.

This dynamic extends to financial infrastructure. A delegate noted that tariff uncertainty and geopolitical tensions have accelerated interest in alternative payment systems such as China's CIPS and Russia's SPFS. Trump responded that "everybody wants to trade with the United States," framing the issue as a question of preference and partnership strength. Yet the growth of alternative systems reflects more complex pressures. CIPS processed $24.47 trillion in 2024,

growing 42.6% year-over-year, driven by concerns about payment channel reliability and sanctions exposure.

The practical implications matter for businesses operating across borders. When payment systems fragment or lack interoperability, transaction costs increase through longer processing times, higher fees, and reduced access to trade financing.9 Development financing intended for SME credit becomes harder to distribute when financial infrastructure splinters along geopolitical lines.

Trump was asked about long-term frameworks for resolving the trade dispute. He referenced ongoing conversations with Chinese leadership and mentioned successful negotiations, citing recent discussions about rare earth material restrictions. However, the response emphasized relationship quality: "great conversations," "great deals," without outlining specific mechanisms for reducing volatility or establishing predictable trade rules.

From a development economics perspective, this uncertainty itself creates costs. Businesses require stable policy environments to make capital investments, manage inventory, and plan production cycles. When tariff levels remain subject to rapid adjustment based on diplomatic developments, companies must maintain larger cash reserves and shorter planning horizons, which is effectively a tax on productive investment.

China's trade practices have drawn criticism from multiple administrations and international partners. Issues around intellectual property protection, state subsidies, and market access represent genuine policy disagreements requiring resolution. The question is whether escalating tariffs provide effective leverage or whether they risk fragmenting the global trading system in ways that harm the smaller economies least equipped to navigate disruption.

Trump's defence of tariffs reflects a particular view of trade relationships: that strategic pressure can reshape imbalanced arrangements and that short-term disruption may serve longer-term national interests. Whether this approach succeeds depends partly on whether it produces sustainable frameworks or merely shifts problems elsewhere, including to the small manufacturers, agricultural exporters, and logistics companies managing daily business realities far from U.S. policy debates.

For businesses caught in the crossfire, policy debates about national interests feel distant from operational realities. When a Christmas product supplier says tariff volatility "could kill us," that's not hyperbole; it's a calculation about survival.13 The trade war's next phase will likely determine not just bilateral U.S.-China relations, but whether the global economy retains enough integration to support the cross-border commerce that many smaller economies depend upon for growth.

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