Description: US President Donald Trump has effectively announced the beginning of a global trade war with the imposition of universal and reciprocal tariffs on all US trade and economic partners and adversaries. Trump announced universal 10% tariffs on all imported goods which would take effect on 05 Apr and specially designated reciprocal tariffs which mostly would impact China, Europe and Asian US trade partners such as Japan, South Korea and Taiwan. In the hour – long theatrical speech Trump announced the imposition of 34% levy on Chinese goods, 20% on European goods and 36% levy on Taiwanese goods. Canada and Mexico as Trump’s primary targets remained impacted by the 25% aluminum and steel tariffs and the additional universal 10% levies on goods which would exclude products from the USMCA trade agreement. Reports from larger banks such as Goldman Sachs and JP Morgan Chase indicated that the imposition could severely impact traditional global trade flows and additionally cause recession spikes which could impact the global economy.
Impact: Trump’s tariffs could ignite severe fluctuations on the global economy which could lead to recession and inflation levels and disrupt global trade flows. Traditional strategic partnerships would most likely be impacted as unconventional allegiances could shift towards conforming to the new global trade order. Even though no timeline was set on the influence of the tariff policy, the introduction of the tariffs as a measure will influence stock markets globally and negatively impact key industries such as supply chains, global trade and most likely the automotive industry. Regions and countries would scramble to adequately respond to Trump’s tariff policies which could considerably influence other spheres of governance globally as the current geopolitical state of affairs is plunged into conflicts, humanitarian and political crises.