Over the long term tariffs will isolate the US from the rest of the world

Over the long term, large-scale tariffs imposed by the US risk isolating the country economically and diplomatically from the rest of the world. Evidence from recent tariff policies and economic modeling suggests that sustained protectionism can erode international partnerships, disrupt global supply chains, and reduce US influence in the world economy.

1.

• Tariffs sharply decrease US trade volumes, particularly with targeted countries such as China, where direct trade flows have collapsed by as much as 90% in some scenarios1.

• As US tariffs rise, other countries redirect their exports and forge new trade relationships, bypassing the US and reducing its centrality in global supply chains12.

2.

• Major US trading partners—including the EU, China, Canada, and Mexico—have imposed retaliatory tariffs, reducing US exports and straining diplomatic ties32.

• Allies have described US tariffs as a betrayal, leading to diminished trust and proposals to reduce investment in the US2.

3.

• As the US pursues unilateral tariff policies, other countries and regions (notably the EU and China) are stepping up to lead new trade agreements and economic coalitions, further marginalizing the US from multilateral frameworks24.

• The US risks losing its traditional leadership role in setting global economic rules and standards2.

4.

• Tariffs lead to a net global welfare loss, with the US facing a sharper decline in GDP and trade than its peers15.

• The risk of a global recession increases as trade wars escalate, and uncertainty about US policy deters international investment65.

• Historical precedents, such as the Smoot-Hawley tariffs of the 1930s, show that protectionism can trigger the formation of trade blocs that deliberately exclude the US, deepening its isolation7.

"The US administration is turning the US into an unattractive trade and investment partner, and isolating the country from the global economy. As other countries adapt to the US' tariffs by forging new trade networks, the US could become an isolated 'trade island' adrift in a rapidly changing global economy."2

"Tariff hikes will usher in a period where global trade falls as a share of GDP... the average effective tariff rate on US imports will climb to about 25%, which is around levels seen during the great depression era."8

Conclusion

Sustained, broad tariffs are likely to isolate the US from the rest of the world over time. This isolation manifests through reduced trade, weakened alliances, diminished leadership in global economic governance, and a shift of global supply chains away from the US. While some short-term gains may occur for specific industries, the long-term trend is toward economic and diplomatic isolation, with significant costs for American consumers, businesses, and the nation’s international standing1257.

1. https://cepr.org/voxeu/columns/roaring-tariffs-global-impact-2025-us-trade-war
2. https://www.chinadailyhk.com/hk/article/609323
3. https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/
4. https://www.levyinstitute.org/publications/trumps-tariffs-ending-globalization/
5. https://www.federalreserve.gov/econres/notes/feds-notes/trade-offs-of-higher-u-s-tariffs-gdp-revenues-and-the-trade-deficit-20250707.html
6. https://www.jpmorgan.com/insights/global-research/current-events/us-tariffs
7. https://cepr.org/voxeu/columns/trumps-tariffs-disregarding-lessons-history-and-scenarios-and-probable-outcomes
8. https://www.oxfordeconomics.com/resource/what-the-us-tariff-hikes-mean-for-the-global-economy/
9. https://www.bankofcanada.ca/publications/mpr/mpr-2025-01-29/in-focus-1/
10. https://www.mckinsey.com/capabilities/geopolitics/our-insights/tariffs-and-global-trade-the-economic-impact-on-business
11. https://budgetlab.yale.edu/research/where-we-stand-fiscal-economic-and-distributional-effects-all-us-tariffs-enacted-2025-through-april
12. https://www.piie.com/publications/working-papers/2025/global-economic-effects-trumps-2025-tariffs
13. https://www.hks.harvard.edu/faculty-research/policy-topics/public-finance/explainer-how-do-tariffs-work-and-how-will-they
14. https://www.rbc.com/en/thought-leadership/what-is-the-impact-of-tariffs-on-the-us-economy/
15. https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/spring-2025-economic-forecast-moderate-growth-amid-global-economic-uncertainty/macroeconomic-effect-us-tariff-hikes_en
16. https://www.citigroup.com/global/insights/global-imprint-us-tariffs-calm-before-storm
17. https://www.claconnect.com/en/resources/articles/25/the-impact-of-trumps-tariffs-a-comprehensive-analysis
18. https://www.progressivepolicy.org/tariffs-and-economic-isolationism-four-principles-for-a-response/
19. https://www.investopedia.com/terms/t/trade-war.asp
20. https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/