News | Iceland Monitor | Wed 9 Apr 2025 | 22.06 GMT

“It’s incredible to watch this chaos,” says economics professor

"He uses these measures to do that," says Gylfi, referring to the US president's 90-day pause in planned tariffs for all countries in the world except China, which gives the countries an opportunity to negotiate with the United States. Composite photo/AFP/Timothy A. Clary/Brendan Smialowski

Gylfi Zoëga, professor of economics at the University of Iceland, describes U.S. President Donald Trump’s recent trade policies as a bold and unprecedented economic experiment.

In an interview with mbl.is, Zoëga comments on the U.S. president’s decision to impose a temporary 90-day pause on planned tariffs for most countries. The move, which includes a 10 percent baseline tariff for all countries except China, is aimed at encouraging foreign governments to negotiate trade deals with the United States. Stock markets have surged in response to the announcement.

“His goal is clearly to push other countries to import more American goods,” says Zoëga. “He’s using these measures to do that. Maybe it will have some long-term effect, but it’s absolutely incredible to watch this chaos unfold.”

“Nobody knows what will happen after these 90 days”

Zoëga emphasizes the uncertainty surrounding the situation and says it’s difficult to predict what will happen once the 90-day period ends.

“Nobody knows what will happen after these 90 days—they have no plan in place. Presumably, negotiations with various countries will have taken place by then.”

He adds that the ultimate aim seems to be reducing the U.S. trade deficit by limiting imports and boosting exports. In doing so, Trump also hopes to stimulate domestic production and create more jobs in the U.S.

“Of course, it would be preferable if more predictable, incremental steps were taken,” Zoëga says. “That would reduce market volatility and uncertainty, which currently has a negative effect on investment and financial markets.”