Easy come easy go. President Trump announced significant tariffs on imports from Canada, Mexico and China before then postponing those on Canada and Mexico following negotiations.
- Economic impact. Tariffs could lead to higher and weaker growth in the US. The Federal Reserve faces a dilemma between addressing inflation and supporting growth, especially in the context of recent high inflation. Other developed markets hit by tariffs would likely cut interest rates, while emerging market central banks may not have this luxury..
- Deglobalisation? US policy could lead to profound shifts in the pattern of global trade, with the use of executive orders and emergency powerss howing how major economic policies can be implemented without Congressional oversight.
- Trading tariffs. China retaliated with its own on US energy products and an antitrust investigation into Google. These responses were measured and targeted – reflecting the strategic nature of global trade and trade negotiations.
- Broader implications. The Trump administration’s use of executive orders and emergency powers suggests a ‘maximalist’ view of presidential power. This approach allows for rapid policy implementation but also creates legal uncertainties and the possibility of policies being subsequently overruled via legal review.
Tariff man strikes back, or the phantom trade war?
Discover our latest thoughts on US tariff policies and their far-reaching effects on the global economy. How will tariffs shape international trade, growth, interest rates and geopolitics?
Duration: 35 Mins
Date: 06 Feb 2025