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NPB vs. LPG: The Tariff Numbers Don't Lie
The End of Free Trade? The US administration has effectively junked the Liberalisation, Privatisation, and Globalisation (LPG) model, replacing it with something that looks a lot more like Nationalism, Protectionism, and Bilateralism (NPB). The numbers don’t lie: US tariffs are now at levels not seen since 1933. But is this a temporary blip, or a fundamental shift? And what are the implications for everyone else? As of September 2025, the US has raked in a staggering $195 billion in tariffs. To put that in perspective, that's almost triple the $70 billion collected in the entire year of 2024. Those are not small numbers. This isn’t just tweaking around the edges; it’s a full-scale assault on the established order. The administration is justifying this by classifying sectors like steel, aluminum, semiconductors, AI chips, and rare minerals as "national security" priorities. This allows them to slap on tariffs and subsidies with impunity. They're even investing directly in companies like US Steel and Intel. (The wisdom of the government picking individual stock winners is, of course, a whole other debate.) Then there's the elimination of de minimis exemptions for postage. This seemingly minor change—requiring full customs clearance on *everything*—could squeeze margins for Indian MSMEs and D2C brands by as much as 15%. It's death by a thousand cuts, really.Building Walls: A New Era of Trade Nationalism?
The Global Ripple Effect It's not just about the US, though. The European Union is pushing its own "strategic autonomy" agenda, aiming to reduce its dependence on other countries. China, not to be outdone, is planning a "dual circulation" strategy to wean itself off foreign markets. Everyone, it seems, is building walls. The World Economic Forum reports over 3,000 trade-hurting protectionist interventions. That's a lot of interventions, and it begs the question: how many interventions are not reported? The US sees India's $35 billion trade surplus as "unfair," and is taking action. Germany and South Korea are also in the crosshairs, facing higher tariffs because BMW, Mercedes, Samsung, and LG are just too successful in the US market. There was even an ICE raid on the LG-Hyundai plant in Georgia, which led to the removal of visa-holding South Korean employees. (The optics on that one are, shall we say, not great.) I've looked at hundreds of these trade agreements, and the speed with which these interventions are implemented is unusual. Now, some argue that the Washington Consensus—the decades-long push for free trade and multilateral institutions—wasn't all it was cracked up to be. It certainly helped create the WTO and fueled the economic rise of India and China. India's IT services exports, for example, went from essentially zero in 1990 to over $200 billion today. But was it sustainable? Did the benefits outweigh the costs? Undoing the Washington Consensus | Hindustan Times explores this shift away from the Washington Consensus in more detail. The WTO system, with its Most Favoured Nation (MFN) principle, has undeniably aided global trade since 1995. But is it equipped to handle this new era of aggressive nationalism? And let's not forget the legal challenge to the US tariff regime currently before the Supreme Court. The legality of these measures is, to put it mildly, uncertain. A Game of Chicken So, what's the real story? Are we witnessing a necessary correction to a flawed system, or a self-inflicted wound that will ultimately hurt everyone? Is this a bold new strategy or a short-sighted protectionist blunder? The numbers paint a stark picture: global trade is being reshaped, whether we like it or not. The question now is whether these new walls will lead to greater self-sufficiency or just a series of costly trade wars. A Race to the Bottom?