Donald Trump has long announced that he was a “tariff man” ready to impose comprehensive fees on imports from countries that have harmed America.
But on Saturday, the 78-year-old US President took the first dramatic step from his second term towards putting this vision into practice-the status of commercial and national economic wars at the top of his agenda.
From his property in Mar Lago in Florida, Trump launched a new aggressive tariff about imports from Canada, Mexico and China, a day after the European Union threatened with high fees.
Trump raises that he can pressure the commercial partners to comply with Washington's desires without leading to an acceleration of harmful inflation, while the cost of living remains the highest concern for many Americans.
For the world, Trump's opening maneuvering on trade means that a series of countries will force the bruises negotiations on everything starting from the trade deficit, the currency policy to immigration to the new desire of America to regional expansion. Financial markets can be shaken and the global economy may suffer.
“These definitions hinder a new era of American commercial protectionism that will affect all American commercial partners, whether their competitors or allies, and they will give international trade significantly,” says Eswar Brasad, a professor at Cornell University.
Economists said that the harshest economies are Mexico and Canada, given their strong dependence on the American economy, as they both face explicit periods if Trump maintains the 25 % definitions. The damage will be exacerbated by the fact that less than six years ago, these countries signed a new trade agreement with Trump in the hope that relations with the United States will settle.
“There are no safe havens,” says Brad Ciser, a former US Treasury official now in the Foreign Relations Council. “Two states, the largest commercial deal with Donald Trump, in his first term, are the first, which is beaten by definitions.”
Neil Shering, chief economist in the economic group, said that the total economic effects depend on the comprehensiveness of the American tariff package and the extent of its imposition.
Economists said that some effects can be reduced by estimating the dollar and replacing the American goods produced locally, while companies may choose to absorb some of the costs through low profit margins. But Trump's first steps – if fully implemented – seemed much greater than the limited commercial wars against China and the G7 allies in his last time.
“This may be a commercial war on doping,” said Ryan Sowet, chief American economist in Oxford Economic. The first round was more targeted. Now they seem to wander around the painting – and faster than I expected. “
“I expected the customs tariff to enter in a more measured way. But we can say that there is one direction here, and that is that it seems that it is rising,” said Evert Essenstat, former Economic advisor for Trump now at Square Batton Bugs.
The first tariff for Mexico, Canada and China may be the beginning. Trump officials are considering imposing a global tariff on all imports, in addition to the fees imposed on Saturday.
Trump now wants to use a customs tariff to generate revenues to pay the price of extending trillion dollars from tax cuts, which can only be achieved through carefully but huge calibration that may be difficult to reverse.
“When it comes to increasing revenues, if the tariff is very low, you will not collect enough money, if it is very high, you will stop trade and then you will not make any money. Bill Rinsh of the Center for Strategic and International Studies will need to find the sweet spot “.
While Trump doubles on the customs tariff, he faces a few resistance from business groups and Republicans in the free market who traditionally arrested his popular policies and sought to pay him. The last movements.
He said: “President Trump has always been clear that if he saw that the Americans were taking advantage of, he would not bear it.” In reference to Canada, Mexico and China, he added: “These governments know very well that they need to stop the flow of drugs and illegal immigrants to our country. The more they do, the better.”
But there are a great danger to Trump. One can be a sale that sends stock markets and the value of retirement plans for Americans. The other is that inflation is picked up again after its gradual fall towards its 2 percent goal over the past two and a half years.
Shearing said that Trump's proposed measures can push the main PCE inflation above 3 percent, compared to 2.6 percent now. He warned that the huge fees on the European Union and China would push prices to grow up.
“This is a great success, especially for working families, including people who voted in favor of Trump on the basis of the logical basis that will reduce prices,” said James Knightley, chief international economist in the United States in Inge.
“The risks are that we see some real pain for the next family sector later this year, especially if it expands the definitions in Europe.”
Democrats, who were looking for ways to attack Trump early in his second term, have already passed on the possibility of high inflation.
“The huge definitions of gas, groceries, phones, televisions and cars means that American families will pay more for the things they need,” said Ron Widen, a member of the Senate in Oregon, said on Friday.
“These definitions are only logical as a class war, forcing the model Americans to put the bill for another round of tax exemptions for Trump and his wealthy comrades.”
Trump found comfort in the fact that inflation remained defeated during the commercial wars in his first term.
But Jay Powell, head of the Federal Reserve, indicated last week that the conditions had changed compared to the low -structural inflation environment before the epidemic. “You are going through a situation in which we do not return to 2 percent, and this is completely different,” he said.
As for the shock economies he survived during the Covid-19 pandemic, Knightley said, for the global economy, a scenario that is likely to be dark is the “huge shock of display.”
“The danger is that this will be very harmful, especially if we see a great response. I do not see how politicians do not respond.”
