Trump’s tariffs are rolling out to retaliate against India and others, bringing new risk to the global economy
The administration’s plan to impose what Trump calls reciprocity tariffs has left investors, executives, administration officials and consumers around the world speculating on what will appear when he hits the podium at 4 p.m. at the White House Rose Garden event. The review boils down to wires, and the scale and scope of the new tax are still being discussed on Tuesday.
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According to Rob Subbaraman, chief economist at Nomura Holdings Inc., the lack of details on the structure, scale and target of the tax has left the world “blindly” into the big announcement.
“The reciprocity tariffs proposed by the Trump administration mean different things to different people,” he wrote in a recent note to clients. While a straightforward approach means that the U.S. matches the tax imposed by other countries on U.S. goods, “we suspect that the standards for U.S. reciprocity tariffs will be broader than that and are indeed difficult to quantify.”
BloombergIn the crosshair
Although Trump has not specified a target yet, he and his lieutenant have called on the EU, Mexico, Canada, Japan, South Korea, Vietnam and India to seek punishment for what they believe is unfair trade practices. Chinese goods have been marked as accumulative 20% of the Suzhou province.
Also Read: India is ready for Trump tariffs, with multiple weight situations
According to Bloomberg Economics, countries from Brazil to China, around $33 trillion of global trade faced by countries with a decline of 4% to 90% of exports to the United States. The team’s global trade policy uncertainty index soared to its highest level in 2009 on Tuesday.
Ordinary U.S. tariffs in all countries could increase by 15 percentage points this year, warning that this would increase core inflation, weaken growth and escalate the risk of recession, according to economists at Goldman Sachs Group Inc.
BloombergTariff World
Since Trump took office in January, Wednesday’s action has been on top of what has been taken. The government imposed a cumulative SURTAX of 20% on all imported goods from China, with an effective efficiency of 25% on commodity goods from Mexico and Canada. Global imports of steel and aluminum also impose global tariffs of 25%. Trump also signed a declaration to impose a 25% tariff on imports of cars and some auto parts, which will take effect in Washington on April 3. There are other department-level taxes, such as on medicines.
Define the countdown
Trump said his so-called reciprocity tariffs would be designed to match tariff and non-tariff barriers imposed by trading partners on U.S. companies, including taxes at the U.S., officials believe in excess trade with the U.S., certain taxes and project-level taxes. For just over a month, officials have been following the “fair and mutual trading” directive announced on February 13.
Economic strike
For months, analysts have been trying to rely on various situations to predict the potential impact of amorphous tariffs. Bloomberg Economics said the biggest approach would total up to 28 percentage points, reaching 4% over the average tariff rate of U.S. GDP and raising prices close to 2.5% over a two to three years.
Also Read: Trump’s tariffs threaten India hit slowing auto parts maker
In all cases, the impact on trading partners will be serious. In terms of the impact on U.S. exports, China, the EU and India may occupy the pain list, although their economies may pass. According to Bloomberg Economics analysis, countries in Canada and Southeast Asia may feel a greater overall impact.
Stayed?
The slow growth of scattered growth is also a problem. According to Shang-jin Wei of Columbia Business School in New York, Shang-jin Wei of Columbia Business School in New York and former chief economist at Asian Development Bank, there are similarities to the stagnant episodes of the 1970s: “Both are very unpleasant times in American society, which are times when many families cause pain. This time, we are likely to suffer from poor policy choices for unpleasant policies.
But, it depends heavily on unknowns – many of them may not be answered in the Rose Garden, including the exact final tariff rates for products and countries, retaliation from trading partners, and reactions from businesses and consumers.
BloombergTit tat?
So far, trading partners have adopted various approaches. China focused on Trump earlier this year, but fought back on tariffs earlier this year, although Souma Province is smaller than the small taxes in the United States and applied to more limited U.S. goods. The EU and Canada immediately retaliate against the US President’s Metal responsibilities.
Many major economic powers are trying to negotiate taxation. Countries, including Vietnam, have vowed to buy more U.S. goods to try to resolve with U.S. surplus and cut import taxes on a range of products.
chain reaction
U.S. stocks recorded their worst quarterly performance since 2023 in the first three months of the year, despite gains from much of the rest of the world. The U.S. treasury climbed almost 3%, partly due to increased concerns about growth. Gold hit record highs, while the dollar weakened. Some investors believe that pessimism is excessive and promptly promotes the potential of trade agreements.
BloombergLarge enterprises
Many U.S. companies are concerned about new responsibilities raising costs and falling into profit margins. Foreign executives must weigh whether to transfer at least some of the production to the United States to comply with the tariffs.
“Obviously, the global business community is concerned about this with fear,” said former Australian diplomat John Denton. Given that the Secretary-General of the Australian Chamber of Commerce, John Denton, said that given that the economy of rebalancing about a quarter of the world’s GDP involves about a quarter of the world’s GDP.
