One thing is certain, according to experts, as US President Donald Trump stoops through tariff announcements: There is still a certain degree of duty.
Trump has announced a number of deals with the European Union, Japan, Indonesia, Vietnam, and the Philippines that have tariffs ranging from 15% to 20% in recent weeks.
He also threatened to impose a 50% tariff on Brazil, announced duties of 30 and 35 percent on major trading partners Mexico and Canada, and mentioned close negotiations with China and India.
Nobody knows how many of Trump’s tariffs will change, but one thing is certain, according to Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada: “No one is receiving zero tariffs.” There is no turning back.
Businesses have been stumbling through months of chaos as a result of Trump’s various announcements, which have forced them to pause investment and hiring decisions.
The World Bank has reduced its global growth forecast from 2.7% in January to a revised forecast for nearly 70% of economies, including those in the US, China, and Europe, and six emerging market regions.
The Group of Seven (G7) countries, which include Canada, France, Germany, Italy, Japan, the United Kingdom, and the US, are all projected by Oxford Economics to experience a moderate recession in their capital spending from the second quarter to the third quarter of this year.
Robert Rogowsky, a professor of international trade at the Middlebury Institute of International Studies, stated to Al Jazeera, “We’re seeing the Donald Trump business style: There’s lots of commotion, lots of claim, lots of activity, and lots of b*******.”
“He operates in accordance with his business model,” he said. He has caused so many of his businesses to go bankrupt because of this. It is neither tactical nor strategic. It is innate.
Rogowsky predicted that Trump would delay his tariff deadline by extending it from April to July, then to August 1.
In response to Robert Armstrong’s statement in early May, Rogowsky said, “Trump Always Chickens Out” is the abbreviation for the US president’s backpedaling on tariffs in the face of stock market turmoil.
Rogowsky said, “He will bump them once more.” He is merely putting forth power, he claims.
Trump’s frequent trade negotiations with China and the EU have been characterized by his repeated policy choices.
China’s tariff rate has increased from 20 to 54, 104 to 145, and then to 30 percent, and the implementation deadline has repeatedly changed.
Following the most recent trade agreement, the proposed tariff rates for the EU have increased by 20 percent, 50 percent, 30 percent, and then 15 percent.
A limited range of exports, including semiconductor equipment and some chemicals, are subject to the EU’s current tariff rate, which only applies to 70% of goods.
Trump has indicated that new tariffs may be enacted for pharmaceutical products, and that European steel exports will continue to be subject to a 50% tax.
Despite the trade agreements, it is still unclear how Trump’s tariffs will actually operate.
Analysts predict that the world has entered a new phase where nations are attempting to reduce their reliance on the US, regardless of whether Trump makes any further announcements.
There is a quiet determination to build resilience and become less dependent on the US now that Trump’s policies have subsided, Nadjibulla said, adding that Trump is pushing countries to address long-standing issues that have previously been untouchable.
According to Tony Stillo, director of Canada Economics at Oxford Economics, Canada is addressing historically politically sensitive issues like inter-provincial trade barriers, despite its preference for other countries to boost exports.
Given that the US is our largest market, giving it a reason for its insistence, Stillo said, “It would be foolish not to provide to the US.”
Mark Carney, the prime minister of Canada, has contacted the EU and Mexico to discuss ways in which his nation’s strained relations with China and India can be improved.
With its first shipment of cargoes to Asia this month, Canada expanded its liquified natural gas exports beyond the US market.
In order to prevent Trump’s tariffs from impacting Canadian businesses, including automakers, Ottawa has put a six-month pause on some US imports to give businesses time to reevaluate their supply chains.
Other nations “don’t seem to be imitating the Trump show] by levying their own tariffs,” adding to “some relief.” The Peterson Institute for International Economics (PIIE) senior fellow Anthony M. Solomon, Mary Lovely, said to Al Jazeera, “They’re witnessing this attempt to strong-arm the rest of the world, but it doesn’t seem to be working.”
However, Lovely said that the world is watching how the tariffs will impact the US economy because “it will also be instructive to other countries.”
As we anticipate, a slowdown turns into a cautionary tale for others if it occurs.
Although the US stock market is nearing its all-time high, the “magnificent seven” is a reference to the largest tech companies, Lovely said, and that only accounts for one aspect of the economy.
Re-entry of industrial policy
Trump’s tariffs add to China’s subsidies-heavy industrial policy, which gives its businesses the ability to outperform its competitors, and other growing issues facing exporters around the world.
With the reintroduction of industrial policies, Nadjibulla said, noting that more and more governments are likely to offer support for their domestic industries. “We’ve entered a period of global economic alignment.
Each nation will have to navigate these situations and find ways to reduce overreliance on the US and China.
Countries that want to support their own domestic industries must, according to Nadjibulla, take into account the World Trade Organization and rules-based trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
“This wild mustang]Trump will need some tremendous leadership around the world,” Rogowsky said.
