The unprecedented tariffs of President Donald Trump about global imports in the United States enter into force on Wednesday, reorganizing a global economic order that has remained largely during generations.
The mere announcement of the tasks last week sent shock waves through global markets and caused billions of dollars in paper losses. Now, consumers and investors will begin to measure the real impact on the economy of the United States as the cost of import taxes begins to flow through supply chains and companies and domestic budgets.
The average rate faced by the dozens of nations Trump pointed out is 29%, with many of up to 40%. The White House published the complete list here. Chinese imports will carry a cumulative rate of 104% due to the new rates that Trump imposed this year, in addition to the taxes he had already promulgated during his first mandate. It entered into force on Tuesday night.
Trump seeks to remodel the global world economic order by reducing the United States dependence in foreign imports. In the midst of a debate about how the tariffs in country by country were calculated, Trump has recognized that his goal was all erase or even reverse the commercial deficit of the United States, that most economists say they have little purpose and it is likely to lead to higher prices and a potentially slower economic growth.
Already, Trump has instituted a 10% reference tariff on goods brought to the United States. And although he said he would negotiate on trade, he gave little sign of giving in, only publishing a note in the morning that believed that China would seek an agreement along with other potential agreements that its administration is discussing with Japan, South Korea and other countries.
Tariffs are not new, and many business leaders have argued for a long time that the United States should do more to prevent some low -cost goods, especially China, to flood their markets.
But Trump surprised the world with his attempt to bring to the United States the production of a wide range of goods that, in most cases, occur more affordable abroad.
“It’s too fast,” said Craig Fuller, founder and CEO of Freightwaves, a logistics consulting. Companies, especially small ones, are simply not equipped to alter their supply chains at the speed and scale Trump wants, added, and will face huge increases in costs Meanwhile while trying to consider them.
“It’s not realistic,” said Fuller.
Trump has shown little appetite for taking “no” for an answer, even when the financial markets sank.
On Monday, he told the White House journalists that “I don’t mind having a beautiful photo at the end”, because “tariffs will make this country very rich.”
Economists are not so optimistic about the rate program. Many are alarm about what could be below. In a note for customers before the deadline on Wednesday, Wells Fargo analysts said tariffs would probably cause a “modest” shock “shock” to the United States economy: as prices increase, they will contribute to erode the growth of real income, cause spending and general economic activity to the contract, they said.
And if other countries retaliate with tariffs that are equivalent to the taxes that the United States has already slapped them, “then the contraction in real GDP is even deeper.”
“The recession in the economy causes the unemployment rate to increase from its current level of approximately 4% to approximately 5%,” they wrote.
This 5% unemployment figure echoes similar projections last week of analysts with JPMorgan, who said “the pinch of the highest prices that we expect in the coming months can hit stronger than in the post-pandemic inflation peak”, since the growth of income was already slowing down.
“In addition, in an environment of greater uncertainty, consumers can be reluctant to immerse themselves in savings to finance spending growth.”
Several countries are already taking reprisals. With tariffs that enter into force on Wednesday, Canada said it was instituting 25% duties in some cars manufactured in the United States and in all car parts made in the United States.
“President Trump caused this commercial crisis, and Canada is responding with purpose and strongly,” wrote Canadian Prime Minister Mark Carney on Tuesday in X.
China has already responded with 34% of tariffs in American products, mainly energy and agricultural products, which led Trump to say that new duties over Chinese products will enter into force on Wednesday. China is also considering the prohibition of US cultural exports such as films.
Perhaps the most worrying thing is that the lowest indebtedness rates that Trump looked for to deal better with his budget plans have not materialized. On Tuesday night, the performance, or the interest rate, that investors demand to provide money to the government had increased above the level it had reached before the implementation of Trump tariffs last week.
Despite all mass movements in the financial markets that have already taken place, an expert says it can be just the beginning.
“A historical change in commercial policy … It will not be digested so quickly,” wrote Jens Nordvig, founder and CEO of former Financial Consultancy, on Tuesday night in X. “It could take weeks and months and even quarter, before we have its complete effects integrated.”
