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.