Abstract
Donald Trump's trade policies during his presidency were characterized by protectionist measures, including tariff increases and trade disputes with major economies. Following his re-election, similar policies could resurface, impacting global trade dynamics. This paper aims to analyze the potential economic consequences of Trump's second leadership on OIC (Organization of Islamic Cooperation) economies, focusing on three key policies: (1) a tariff on steel and aluminum, (2) a trade war with China, and (3) geopolitical tensions with BRICS nations. The GTAP (Global Trade Analysis Project) model is employed to simulate the short-run effects of these policies on GDP, trade balance, and welfare in OIC countries. The results suggest that increased tariffs and trade conflicts may lead to shifts in global trade patterns, with potential negative spillover effects on OIC economies, particularly those with strong trade ties to the US, China, and BRICS. Trade diversion effects are also observed, indicating possible shifts in export flows. The findings provide insights into how OIC nations might navigate the uncertainties of a renewed Trump administration's economic policies. Keywords: Donald Trump, OIC economies, Tariff, GTAP.References
Aguiar, A., Narayanan, B., & McDougall, R. (2016). An overview of the GTAP 9 Data Base. Journal of Global Economic Analysis, 1(1), 181–208. https://doi.org/10.21642/JGEA.010103AF
Ajami, R. A. (2020). US-China trade war: The spillover effect. Journal of Asia-Pacific Business, 21(1), 1–3. https://doi.org/10.1080/10599231.2020.1708227
Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). The impact of the 2018 tariffs on prices and welfare. Journal of Economic Perspectives, 33(4), 187–210. https://www.jstor.org/stable/26796842
Armington, P. S. (1969). A theory of demand for products distinguished by place of production. IMF Staff Papers, 16(1), 159–178. https://doi.org/10.2307/3866403
Bao, A. (2025, February 4). China retaliates with additional tariffs of up to 15% on select U.S. imports starting Feb. 10. CNBC. https://www.cnbc.com/2025/02/04/china-levies-tariffs-on-select-us-imports-starting-feb-10.html
Bond, E. D., Spak, G., Moran, W., Scoles, S., Solomon, M., & Saccomanno, I. (2025, February 17). President Trump expands steel and aluminum tariffs to all countries; effective March 12, 2025. White & Case. https://www.whitecase.com/insight-alert/president-trump-expands-steel-and-aluminum-tariffs-all-countries-effective-march-12#article-content
Bown, C. P. (2018, March 5). Trump’s steel and aluminum tariffs: How WTO retaliation typically works. Peterson Institute for International Economics. https://www.piie.com/blogs/trade-and-investment-policy-watch/2018/trumps-steel-and-aluminum-tariffs-how-wto-retaliation
Burfisher, M. E. (2011). Introduction to computable general equilibrium models. Cambridge University Press.
Cai, Y., Mignon, V., & Saadaoui, J. (2022). Not all political relation shocks are alike: Assessing the impacts of US–China tensions on the oil market. Energy Economics, 114. https://doi.org/10.1016/j.eneco.2022.106199
Celebi, K., & Welfens, P. J. J. (2020). The economic impact of Trump: Conclusions from an impact evaluation analysis (EIIW Discussion Paper No. 281). Europäische Institut für Internationale Wirtschaftsbeziehungen (EIIW). https://eiiw.wiwi.uni-wuppertal.de/fileadmin/eiiw/Daten/Publikationen/Gelbe_Reihe/disbei281.pdf
Chen, H. (2024). The impact of the US-China trade war on the global macroeconomy. SHS Web of Conferences, 188. https://doi.org/10.1051/shsconf/202418802013
Dixon, P. B., & Jorgenson, D. W. (2013). Introduction. In P. B. Dixon & D. W. Jorgenson (Eds.), Handbook of computable general equilibrium modelling (Vol. 1, pp. 1–103). Elsevier. https://doi.org/10.1016/B978-0-444-59568-3.00001-8
Duche-Pérez, A. B., Plata, A. R. M. R., Gutiérrez-Aguilar, O. A., & Vera-Revilla, C. Y. (2024). Evaluating the impact of U.S. protectionist trade policies. Journal of Infrastructure, Policy and Development, 8(10), 7066. https://doi.org/10.24294/jipd.v8i10.7066
Erum, N., Sohag, K., Said, J., Musa, K., & Asghar, M. M. (2024). Governance, fiscal expenditure, and economic growth in OIC countries: Role of natural resources and information communication technology. Resources Policy, 90. https://doi.org/10.1016/j.resourpol.2024.104717
Fajgelbaum, P., & Khandelwal, A. (2021). The economic impacts of the US-China trade war. Annual Review of Economics, 14, 205–228. https://doi.org/10.1146/annurev-economics-051420-110410
Fakhrunnas, F., & Fadillah, A. (2023). The impact of the US-China economy on the economic growth of OIC member countries. Global Review of Islamic Economics and Business, 11(1), 135–148. https://doi.org/10.14421/grieb.2023.111-09
Gouvea, R., Li, S. H., & Vora, G. (2021). The role of China and India in Brazil’s economy. Modern Economy, 12, 1263–1285. https://doi.org/10.4236/me.2021.128066
Gu, R., Guo, J., Huang, Y., & Wu, X. (2023). Impact of the EU carbon border adjustment mechanism on economic growth and resources supply in the BASIC countries. Resources Policy, 85. https://doi.org/10.1016/j.resourpol.2023.104034
Hertel, T. W. (Ed.). (1997). Global trade analysis: Modeling and applications. Cambridge University Press.
Holztman, H.-D., & Voort, A. V. D. (2025, January 28). BRICS – What are the key issues for 2025? Friedrich Naumann Foundation. https://www.freiheit.org/brics-what-are-key-issues-2025
Hosoe, N., Gasawa, K., & Hashimoto, H. (2010). Textbook of computable general equilibrium modelling: Programming and simulations. Palgrave Macmillan.
Islamic Centre for Development of Trade (ICDT). (2024). Executive summary of the annual report on trade and investments among the member states of the OIC. Organization of Islamic Cooperation (OIC).
Itakura, K. (2020). Evaluating the impact of the US–China trade war. Asian Economic Policy Review, 15(1), 77–93. https://doi.org/10.1111/aepr.12286
Jahan, A., & Al-Harbi, T. (2024). Global trade dynamics: The effects of tariffs and trade agreements on international business. International Journal of Economics, Commerce, and Management, 1(2). https://doi.org/10.62951/ijecm.v1i2.315
Janusch, H., & Mucha, W. (2017). America first: Power and geopolitics in US trade policy under President Trump. Sicherheit und Frieden (S+F) / Security and Peace, 35(3). https://doi.org/10.5771/0175-274X-2017-3-8
Kluge, J. (2024). Russia-China economic relations: Moscow’s road to economic dependence (SWP Research Paper). Stiftung Wissenschaft und Politik. https://doi.org/10.18449/2024RP06
Korobkov, A. (2019). Donald Trump and the evolving U.S.-Russia relationship. PERCEPTIONS: Journal of International Affairs, 24(1), 39–58.
Kumar, S., Shahid, A., & Agarwal, M. (2024). Is BRICS expansion significant for global trade and GDP? BRICS Journal of Economics, 5(1). https://doi.org/10.3897/brics-econ.5.e139877
Lee, C.-W., & Khan, A. Z. (2025). The impact of Trump’s tariff policies on global trade dynamics: A case study of major U.S. trade partners. International Journal of Business and Economic Affairs, 10(1). https://doi.org/10.24088/IJBEA-2025-101006
Li, M., Balistreri, E. J., & Zhang, W. (2020). The U.S.–China trade war: Tariff data and general equilibrium analysis. Journal of Asian Economics, 69. https://doi.org/10.1016/j.asieco.2020.101216
McCarthy, S. (2025, July 10). Trump is threatening tariffs on a Beijing-backed group. What’s got him so worried? CNN Business. https://edition.cnn.com/2025/07/10/business/brics-tariff-threat-trump
Nantembelele, F. A., Yilmaz, M. K., & Ari, A. (2023). The effects of a US-China trade war on Sub-Saharan Africa: Pro-active domestic policies make the difference. Journal of Policy Modeling, 45(6), 1296–1310. https://doi.org/10.1016/j.jpolmod.2023.06.002
Neuffer, P. (2025, March 3). Trump hikes tariffs on China by 10%. Supply Chain Dive. https://www.supplychaindive.com/news/trump-tariffs-china-hike-20-percent-canada-mexico/741444/
Rosyadi, S. A., & Widodo, T. (2018). Impact of Donald Trump’s tariff increase against Chinese imports on global economy: Global Trade Analysis Project (GTAP) model. Journal of Chinese Economic and Business Studies, 16(2), 125–145. https://doi.org/10.1080/14765284.2018.1427930
Rusli, M., Rusgianto, S., & Sukmana, R. (2023). Economic growth factors of member countries of the Organisation of Islamic Cooperation (OIC) influenced by the influence of foreign direct investment and foreign debt. International Journal of Innovative Science and Research Technology, 8(12), 10. https://doi.org/10.5281/zenodo.10441531
Salotti, S., Rocchi, P., Rueda Cantuche, J., & Arto, I. (2019). Macroeconomic effects of US tariff on steel and aluminium: Who would pay the bill. Publications Office of the European Union. https://doi.org/10.2760/387494
Saussay, A. (2024). The economic impacts of Trump’s tariff proposals on Europe. Grantham Research Institute on Climate Change and the Environment, LSE.
Shakil, I. (2025, January 31). Trump repeats tariffs threat to dissuade BRICS nations from replacing US dollar. Reuters. https://www.reuters.com/markets/currencies/trump-repeats-tariffs-threat-dissuade-brics-nations-replacing-us-dollar-2025-01-31/
Sherman, N. (2025a, February 12). Trump says no exemptions with metal tariffs to start in March. BBC. https://www.bbc.com/news/articles/c360dz384n5o
Sherman, N. (2025b, February 28). Trump says US will impose additional 10% tariff on China. BBC. https://www.bbc.com/news/articles/ce8yy3wpn6eo
Su, Q. (2024). To what extent did US-China trade war affect the global economy. SHS Web of Conferences, 181. https://doi.org/10.1051/shsconf/202418103017
The White House. (2025, February 11). Fact sheet: President Donald J. Trump restores Section 232 tariffs. https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-restores-section-232-tariffs/
Timmons, H. (2018, March 5). Five US jobs will be lost for every new one created by Trump’s steel tariffs. Quartz. https://qz.com/1221912/trump-tariffs-five-us-jobs-will-be-lost-for-every-new-one-created-by-trumps-steel-tariffs
United States International Trade Commission. (2023). Economic impact of Section 232 and 301 tariffs on U.S. industries (Publication No. 5405). https://www.usitc.gov/publications/332/pub5405.pdf
Ur-Rashid, H. H., & Khan, M. A. (2024). Standards and non-tariff barriers in trade – A case study of South Asia. Structural Change and Economic Dynamics, 69, 427–437. https://doi.org/10.1016/j.strueco.2024.03.002
U.S. Department of State. (2022). U.S. relations with Indonesia. https://www.state.gov/u-s-relations-with-indonesia/
U.S. Department of State. (2024). U.S. relations with Malaysia. https://www.state.gov/u-s-relations-with-malaysia/
Xu, S., Qian, J., Chen, Y., & Zhang, H. (2025). Impact of the Regional Comprehensive Economic Partnership (RCEP) implementation on agricultural sector in regional countries: A global value chain perspective. Journal of Integrative Agriculture, 24(1), 380–397. https://doi.org/10.1016/j.jia.2024.11.035
Zhao, H. (2025). Assessing the macroeconomic impacts of the 2025 US tariffs (BIS Working Paper No. 1316). Bank for International Settlements. https://www.bis.org/publ/work1316.html
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
MBER have CC-BY-SA or an equivalent license as the optimal license for the publication, distribution, use, and reuse of scholarly work.
In developing strategy and setting priorities, MBER recognize that free access is better than priced access, libre access is better than free access, and libre under CC-BY-SA or the equivalent is better than libre under more restrictive open licenses. We should achieve what we can when we can. We should not delay achieving free in order to achieve libre, and we should not stop with free when we can achieve libre.
MBER is licensed under a Creative Commons Attribution 4.0 International License
You are free to:
- Share copy and redistribute the material in any medium or format
- Adapt remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.