The aggressive tariff policy pursued by US President Donald Trump is set to leave a serious mark on the global economy. A financial tsunami may be on the horizon. According to Bloomberg, the damage to global trade from US-imposed tariffs could reach a staggering $33 trillion, a truly impressive figure.
The cumulative toll of Washington’s import duties on international trade could run into tens of trillions of dollars. “Some $33 trillion in global trade is in the crosshairs,” Bloomberg reports. Currency strategists at Goldman Sachs estimate that the average US tariff on foreign goods will rise by 15 percentage points.
The greatest burden of Trump’s trade policy will fall on emerging markets, especially BRICS countries. Brazil and China are among those expected to be hit hardest. Some developing economies may see exports to the US plunge anywhere from 4% to as much as 90%. Against this backdrop, the Global Trade Uncertainty Index spiked to levels not seen since the 2008–2009 global financial crisis.
At present, US tariffs are affecting goods from the majority of trading partners. Imports from Mexico and Canada are subject to a 25% duty, with the exception of Canadian energy exports, which are allowed at a reduced 10% rate. China faces a different challenge. Since early spring, Chinese exporters have been paying 20% tariffs, and the White House has since doubled rates on Chinese imports. Trump has also imposed a 25% tariff on foreign automobiles and auto parts. Similar duties apply to imported steel and aluminum.
According to Bloomberg analysts, these sweeping trade measures could trigger a profound transformation of global trade as we know it. The Trump administration plans to tighten restrictions even further, marking what experts say is the largest tariff expansion in US policy in over a century. Such a move will undoubtedly have consequences for both the global and American economies. Inflation, which is already elevated, will likely rise higher. Analysts warn that in a worst-case scenario, a global recession could be just around the corner.
