Lori Wallach Slams Trump’s 'Abuse of Tariff Tool' amid Trade Chaos

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Trade expert Lori Wallach warns that Trump’s tariff tactics lack strategy and risk harming US industry, while benefiting corporate profiteers

By S JHA

NEW DELHI, August 1, 2025 — Trade expert Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project, launched a sharp critique of the Trump administration’s tariff strategy during an interview on Democracy Now! on Wednesday, calling it “an abuse of the tariff tool” driven by “foreign policy whims” and personal politics rather than sound economics.

Wallach, a veteran trade justice advocate and board member of the Citizens Trade Campaign, highlighted a string of inconsistent and politically motivated decisions by the Trump administration — including newly imposed 50% tariffs on Brazil, weakening of Biden-era China trade policies, and tariff rollbacks on autos imported from Europe, Japan, and South Korea.

“You’ve got total, random chaos,” Wallach said. “What the Trump administration is doing, basically, is an abuse of the tariff tool … to threaten countries based on foreign policy whims,” she remarked.

Brazil Tariffs: Politically Driven Sanctions?

Wallach criticized the recent imposition of 50% tariffs on Brazilian imports, questioning the logic behind punishing a country with whom the US has a trade surplus. Instead of aiding domestic industry, she argued, the move appeared aimed at retaliating for Brazil’s prosecution of former President Jair Bolsonaro, a Trump ally.

“This is not the country you’d want to be hitting with trade sanctions if you’re trying to balance trade and build manufacturing,” Wallach remarked. “It’s about Bolsonaro’s legal troubles, not economics,” she quipped.

Tariff Rollbacks: Undermining Labour Standards

Wallach raised alarm over Trump’s reduction of auto tariffs — from 25% to 15% — for countries with low-wage supply chains, such as Bulgaria, Vietnam, and Cambodia, which supply Europe, Japan, and Korea respectively. She criticized the lack of labour or wage guarantees tied to these rollbacks, in contrast to tariffs on North American imports, where enforceable labour standards exist under the USMCA.

“They’re giving away leverage,” Wallach warned. “Dropping tariffs without demanding better labour conditions undercuts domestic auto production and working standards globally,” she stated.

Softening on China? Flattery Over Policy

Wallach also pointed to what she sees as Trump’s softening stance on China — not out of economic interest, but in pursuit of personal diplomacy. “He so wants to have a summit with the president of China and be flattered there,” she said. The trade expert stated” “That’s why we’re seeing the rollback of stronger Biden-era trade stances.”

Who Really Pays Tariffs?

Challenging conventional narratives from both political camps, Wallach debunked the myth that consumers always bear the cost of tariffs or that foreign governments pay directly. “The neoliberal line that tariffs are just a tax on consumers is wrong. And Trump’s claim that foreign governments pay is also wrong,” she explained. “The truth is it depends. Often, foreign companies eat the cost or split it with US firms to stay in the market,” she explained.

She further alleged that some US companies are using tariffs as cover for price gouging, pocketing inflated profits without absorbing real costs.

The Bigger Picture: Trade as a Tool for Industrial Strategy

Wallach emphasized that tariffs can still play a vital role — if used strategically, in combination with industrial, climate, and labour policies. The current path, however, lacks coherence. “We have a trillion-dollar trade deficit. That has deindustrialized us. We can’t even make basic supplies, as we saw during COVID,” she said. “In a climate crisis, having everything made in one place and shipped across oceans is a disaster,” argued the veteran trade expert.

She called for diversified production, regional supply chains, and a smarter, values-based trade policy that promotes sustainable development, not political score-settling.