Donald Trump’s trade war is costing the world a fortune - and the cost is going up

July 24, 2026 — 11:58am

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The global economy is not living rent-free in the mind of Donald Trump.

It is costing the world a fortune, and Trump is finding new ways to increase the price that is being borne not only by US consumers but everyone from Australian manufacturers to Indian rice farmers.

That he slapped 12.5 per cent tariffs on 60 nations, which account for about 99 per cent of US imports, at the same time as his efforts to prosecute a war in the Middle East drove oil prices beyond $US100 ($140) a barrel speaks to the unhinged approach of Trump to his economy and to economic policy in general.

He also did it on the same day that investors cast a more critical eye towards the huge amount of money being spent by tech firms on the AI revolution that is keeping the US economy – and increasingly the Australian economy – afloat.

Bloomberg’s “Magnificent 7 Index”, which tracks the value of Apple, Microsoft, Amazon, Nvidia, Meta Platforms, Tesla and Alphabet, fell by almost 5 per cent overnight. That’s $US797 billion in market value or $1.1 trillion.

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© The Age