Donald Trump has just announced the most self-destructive set of policies in modern American economic history.

The United States built the post-war global trading system and its companies are the most enmeshed in it. Trump is about to tear it down, with unknown but inevitably destructive consequences not just for the US but for the rest of the world.

US President Donald Trump displays the signed executive order after his tariff announcement.Credit: Bloomberg

In his peculiar and rambling speech in the Rose Garden, Trump delivered his “Liberation Day” announcement of a 10 per cent baseline tariff on all imports to the US and far more punitive rates on imports from most of America’s major trading partners, allies and perceived foes alike. The average rate on imports to the US will be far higher than was anticipated – around, or even above, 20 per cent.

The “reciprocal” tariffs bear no relationship to the World Trade Organisation’s effective tariff rates and there was no explanation for how they were calculated, other than references to non-tariff barriers and value-added taxes (which don’t discriminate between sales of domestic or imported products).

If the initial tariffs Trump slapped on steel and aluminium imports were, as the Wall Street Journal wrote at the time, “the dumbest trade war ever”, the hotchpotch of tariffs Trump unveiled deserve even stronger language.

They will diminish US and global growth, increase US inflation, act as a regressive tax on US consumers and provide a pandemic-like disruption to global supply chains.

They’ll also spread waves of economic loss throughout the world, as everything including Australia’s beef industry, Europe’s car industry and Bangladesh’s clothing factories is hit by Trump’s beloved tariffs.

They’ll also provoke targeted........

© The Sydney Morning Herald