In recent weeks, Trump has announced several agreements with countries such as the European Union, Japan, Indonesia, Vietnam, and the Philippines, with tariffs ranging from 15% to 20%.
Additionally, Trump has threatened Brazil with a 50% tariff, imposed duties of 30% and 35% on major trading partners Mexico and Canada, and is in close talks with China and India regarding deals.
It’s uncertain how many of Trump’s tariff rates will be finalized, but Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, emphasizes that “nobody is getting zero tariffs. There’s no going back.”
Trump’s announcements have caused months of uncertainty for industries, pausing investment and hiring decisions.
The World Bank has reduced its growth forecasts for nearly 70% of economies, including the US, China, and Europe, due to ongoing trade tensions.
Oxford Economics forecasts a short recession in capital spending for the Group of Seven countries from the second to the third quarter of this year.
Robert Rogowsky, a professor of international trade, describes Trump’s business style as creating commotion and claiming power, likening it to his instinctive approach to business that often leads to bankruptcy. He expects further delays in implementing tariffs as Trump exerts his image of power.
Trump’s back-and-forth policy moves have characterized his trade agreements with major partners like China and the EU, resulting in fluctuating tariff rates and implementation deadlines.
The EU currently imposes a tariff rate of 50% on European steel exports, and pharmaceutical products may face new tariffs as well.
Despite the trade deals, many details on how Trump’s tariffs will be implemented in practice remain unclear.
Analysts agree that the world has entered a new phase where countries are seeking to become less reliant on the US.
Canada, for example, is addressing inter-provincial trade barriers and expanding exports beyond the US market to build resilience.
Other countries are not imitating Trump’s tariffs, but are closely monitoring the impact on the US economy, which will serve as a cautionary tale for others if a slowdown occurs.
Trump’s tariffs also come amidst challenges like China’s subsidy-heavy industrial policy, which allows businesses to undercut competitors.
Nadjibulla believes that governments will increasingly support their domestic industries, and leaders will need to navigate these policies while considering rules-based trade agreements.
Rogowsky predicts that Trump’s actions will ultimately lead to a recession.
