Research

Since Liberation Day, markets have been concerned that the import tariffs proposed by Trump will lead to chaos for global trade, particularly because it is likely that many countries will implement countermeasures. It is therefore understandable that markets breathed a sigh of relief when Trump announced this week that, for most countries, the import tariffs will be limited to 10% for the next three months (although higher tariffs will continue to apply to specific products such as cars, pharmaceutical products, and steel). Only China – with which the US has the largest trade deficit – is excluded from this measure. The tariffs for this country – and the counter-tariffs China has imposed in response – are so high that hardly any trade between the two countries will take place. This will also have major geopolitical consequences...