The radical measures taken by the Trump administration to reshape the global trade landscape are pushing the United States and the world economy into uncharted waters.

Written by: Long Yue, Wall Street Insights

The radical measures taken by the Trump administration to reshape the global trade landscape are pushing the United States into a new phase of uncertainty filled with protectionism, posing severe challenges for the global economy. Whether this policy can revitalize American manufacturing as expected remains to be seen, but the potential risks of inflation and shocks to financial markets are becoming increasingly apparent.

According to media reports on Thursday, the comprehensive tariff policy in the United States began to take effect after midnight New York time on Thursday. Previously, the U.S. Customs and Border Protection had been given a week to make necessary adjustments. After months of chaotic threats and reversals, almost all of America's trade partners will face higher tariff barriers.

It is estimated that the new tariffs will raise the average tariff rate in the U.S. from last year's 2.3% to an astonishing 15.2%. According to CCTV News, on July 31 local time, the White House issued an executive order to reset the "reciprocal tariff" rate standards for certain countries: the countries listed in Attachment 1 of the executive order will be subject to individual rates, while those not listed will uniformly apply a 10% rate; if any country or region circumvents tariffs through third-party transshipment, their goods will be subject to a 40% transshipment tax. The White House announcement stated that the new tariffs will take effect on August 7.

This move has already raised alarms in the financial markets. Analysts from major Wall Street institutions have warned that investors should prepare for a market correction. Morgan Stanley, Deutsche Bank, and Evercore ISI all pointed out in reports on Monday that the S&P 500 index may face a short-term decline in the coming weeks or months.

Tariff details remain unresolved, global supply chains under pressure

Since Trump first announced and then suspended tariffs in April of this year, the global economy has been shrouded in turmoil, with countries engaging in months of tense negotiations with the United States. This uncertainty has led to widespread anxiety among businesses regarding supply chain disruptions and rising costs.

Now, the broad framework of the new tariffs has been established, and most economies have accepted the reality that high tariffs will persist in the long term. Many countries have committed to investing hundreds of billions of dollars in the U.S. in exchange for lower tariff rates.

However, key details of Trump's plan remain unresolved, bringing ongoing uncertainty to global supply chains.

For example, the tariff exemptions for automobiles from the EU, Japan, and South Korea have yet to be legislated, and until then, automobiles will still face higher costs. Countries like the EU, Japan, and South Korea, which have reached agreements with Trump, still have their negotiators working behind the scenes to seek further reductions for key export industries. Additionally, specific details regarding investment commitments and adjustments to market access policies have yet to be announced.

Meanwhile, some countries' last-ditch efforts to secure more favorable terms have failed. The Swiss president left Washington on Wednesday without successfully reducing the 39% tariff they face. According to CCTV News, on Wednesday, Trump signed an executive order imposing an additional 25% tariff on goods from India in response to India's continued "direct or indirect imports of Russian oil."

Currently, tariff negotiations with some of the U.S.'s largest trade partners—Mexico and Canada—are still proceeding independently on another track. Trump has also vowed to soon announce tariff plans targeting key industries such as pharmaceuticals. CCTV reported that Trump has announced plans to impose approximately 100% tariffs on chips and semiconductors.

Economic alarms: Difficult times ahead

Trump insists that high tariffs will significantly reduce the trade deficit and force companies to bring manufacturing back to the U.S. However, critics argue that this move could lead to uncontrollable inflation and shortages of goods on store shelves.

Although the full economic impact has yet to materialize, recent economic data has raised red flags. Reports indicate that July's employment data showed the most significant downward revision in U.S. job growth since the COVID-19 pandemic. At the same time, due to slowing consumer spending and businesses adapting to changes in trade policy, economic growth in the U.S. has already slowed in the first half of this year.

Currently, the unemployment rate remains low, and prices have not surged, partly because businesses have so far absorbed most of the increased costs. However, experts warn that this situation is unlikely to last. Wendy Cutler, vice president of the Asia Society Policy Institute and former U.S. trade negotiator, stated, "There are signs that more difficult times are coming. Many companies built up inventories before the tariffs took effect." She believes that since companies are unlikely to sustain lower profit margins for long, "price increases are almost inevitable."

The contradiction between rising tariff revenue and manufacturing prosperity

Despite facing numerous challenges, Trump insists that his measures will usher in a new golden age of the economy and dismisses economic data that does not align with his narrative. He has also praised the growing tariff revenue, even suggesting that it could lead to tax refund checks for some Americans. Data from the U.S. Treasury shows that tariff revenue has soared to a record $113 billion in the nine months ending in June.

However, it remains unclear whether the plan's other explicit goal—bringing production back to the U.S.—is making progress. Brad Jensen, a professor at Georgetown University's McDonough School of Business, pointed out the inherent contradiction between its policy goals. He stated that achieving both rising tariff revenue and a thriving manufacturing job market is difficult.

"Both cannot be true at the same time," he explained, "If domestic manufacturing rebounds, then we wouldn't have so much tariff revenue," because imports would decrease. This fundamental contradiction raises a significant question mark over the long-term viability of Trump's trade agenda.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。