Trump's tariffs are the most significant change in
global trade in 100 years, and a global trade war appears inevitable.
Editorial
Author's title, BBC News World
April 3, 2025
https://www.bbc.com/mundo/articles/c1wdj4x1j92o
Their impact on the global economy will be enormous.
The massive adoption of tariffs on imports from all
corners of the globe announced Wednesday by US President Donald Trump will be
felt far beyond the US border.
The measures that will take effect between this week
and next include a 10% minimum tax on all products entering the US and higher
tariffs on the world's major economies, as well as several emerging ones.
Faisal Islam, economics editor of the BBC, states that
these tariffs "are the biggest change in global trade in 100 years."
He explains that the effect of these measures can be
seen in the lines on the graph of US tariff revenues, which have jumped to
levels not seen in a century, beyond those recorded during the height of
protectionism of the 1930s.
But also, in the declines recorded in the world's
major stock markets.
"But the true measure of these changes will be
the significant alterations in long-standing patterns of global trade,"
Islam points out.
"In essence, this is a universal 10% tariff on
all US imports worldwide, which will take effect Friday night. In addition,
dozens of the 'worst offenders,' as Trump has called them, will be reciprocally
taxed for running trade surpluses," he adds.
He asserts that the tariffs on Asian countries are
extraordinary.
"They will destroy the business models of
thousands of companies, factories, and possibly entire countries. Some of the
supply chains created by the world's largest companies will be instantly
disrupted," he notes.
Ken Roggoff, former chief economist at the
International Monetary Fund, indicates that the consequences of imposing such
high tariffs on imports entering the US are "incredible."
"(Trump) has just dropped a nuclear bomb on the
global trading system," Rogoff told the BBC's World Business Report.
Olu Sonola, head of US Economic Research at Fitch
Ratings, noted that tariffs imposed on all imports are now around 22%, which is
about ten times higher than they were a year ago.
The United States has not had such high tariffs for
more than a century.
"This is a radical change, not only for the US
economy, but for the global economy," Sonola wrote.
What is the purpose of tariffs?
The US formula for so-called "reciprocal
tariffs" basically consists of establishing a charge for countries that
have a trade surplus in goods with the US, because they export more to the
United States than they import from there. For those without a trade surplus, a
tariff is still applied that brings them up to the universal reference level
established by Trump of 10%.
Given that the US president has shown signs of taking
tough positions in the past that ultimately seek to force more favorable terms
for his country, some have speculated that the real objective of these tariffs
is nothing more than a "grand bargain."
However, the US government appears to be claiming
tariff revenue for the tax cuts it wants to implement, extending the cuts it
approved during its first administration and which are due to arrive at the end
of this year. Therefore, the scope for rapid adjustment seems limited. As one
White House official bluntly stated: "This is not a negotiation, it's a
national emergency."
"The goal of this policy is to get the US trade
deficit 'back to zero.' It's a total reconfiguration of the global
economy," says Faisal Islam.
The reindustrialization of the US is another of the
stated goals of these tariffs. Not surprisingly, Trump has repeatedly said that
companies that want to avoid these costs can locate in the US. But moving
factories will take years.
Meanwhile, the US could suffer an inflationary blow.
"Tariffs of this magnitude in East Asia,
especially those of 30% or 40%, will accelerate the rise in prices of clothing,
toys, and electronics," says Faisal Islam.
And for the countries where these goods are
manufactured, there could also be damaging effects.
"Many countries will likely enter a recession. If
this tariff is maintained for a prolonged period, most of the forecasts can be
ruled out," Sonola points out.
Among the countries that could suffer a recession is
the United States itself.
According to Rogoff, the chances of the US falling
into such a crisis rose to 50% after Trump's announcements.
Moody's Analytics has been warning that the United
States could soon enter a recession and has also said that the country's
finances could experience a multi-year decline due to its growing budget
deficits and expensive debt.
What will the response be?
The question now is how the rest of the world will
respond.
Faisal Islam points out that some European consumers
will have the opportunity to benefit from the diversion of this trade into
clothing and electronics more cheaply.
"Beyond the United States, which has become an
isolationist economy, the rest of the major economies could opt for greater
trade integration," he notes.
But, as the fall in Tesla car sales illustrates, only
part of this story is about the response of governments. Today, consumers can
also respond. It could turn into a new kind of trade war on social media.
"Europe may decide to stop buying the big-name
brands created in the United States and loved around the world," says
Islam.
He adds that as part of that response, the social
media monopoly of the US tech giants could also be shaken.
"US authorities could be forced to raise interest
rates to combat the inevitable spike in inflation," he says.
"A global trade war seems inevitable," he
warns.