How the World Might Respond to America

During Donald Trump’s second term as president, his trade policy became even more aggressive and unpredictable. At a time when the United States traditionally remained one of the key players in the global economy, decisions made by the Trump administration could put America’s strongest and most successful sector — services exports — in serious jeopardy. This is precisely the field where the U.S. has been immensely successful and derives significant financial benefits, but it is also the very success that could become a target for retaliatory measures by foreign countries.

Traditionally, the U.S. foreign trade balance in goods has been characterized by a persistent deficit, which was Trump’s main argument for imposing tariffs. However, the situation is entirely different in services — in 2024, the U.S. sold $1.1 trillion worth of services to foreign countries, achieving a net export of $295 billion. This sector includes financial hedging, cloud computing, consulting services, and data management — the very elements underpinning America’s global power.

Yet here lies the paradox of Trump’s approach: under the logic of his trade wars, if a country has a deficit, it should impose reciprocal tariffs on imports. If other countries apply the same logic and impose tariffs on American services, the outcome could be devastating for both the global economy and the U.S. itself. According to an analysis by The Economist, such retaliatory tariffs could reach 28% in China, 15% in the European Union, and up to 41% in Saudi Arabia. Venezuela could even impose tariffs as high as 47% against American services.

At the same time, imposing tariffs on services is technically challenging, since — unlike goods — services do not arrive in containers and cannot be easily tracked at customs. However, countries have other tools at their disposal — antitrust investigations, licensing requirements, data localization rules, and special taxes on digital services. For example, China has been restricting American banks and tech companies from fully entering its market for years. In Brazil and India, giants like Alphabet and Apple frequently find themselves targeted by regulatory crackdowns.

In Europe, digital services taxes are another way governments attempt to influence companies holding dominant positions in their economies. Although such taxes are formally applied to all firms, in practice they mainly impact American giants like Amazon and Meta.

The European Union has also created a special “anti-coercion mechanism” that allows it to respond to trade or diplomatic pressure using various methods — such as excluding American companies from public tenders or restricting intellectual property rights. These measures are not tariffs in the classic sense, but their impact is similar — boosting the competitive advantage of domestic companies over foreign ones.

Michael Froman, former U.S. chief trade negotiator, notes that tariffs should be a means to an end, not an end in themselves. Tariffs make sense only when a country uses them to set specific demands and negotiate for targeted concessions. However, Trump’s approach seems to rely less on this strategic vision and more on emotional and populist rhetoric.

If this trend continues, America’s trade partners may no longer remain patient and could act directly against its strongest sector. Ultimately, America’s financial, technological, and consulting giants could find themselves vulnerable to the consequences of mechanical political decisions. The United States’ global influence has been reinforced not just by military or financial power, but also by its dominance in services exports — and if this sector becomes a target, the consequences could be far more serious than they initially appear.

Prepared based on reporting from The Economist.