Main Quotes Calendar Forum
flag

FX.co ★ Trump’s protectionist policy takes its toll on global economy

back back next
Forex Humor:::2025-08-01T11:29:47

Trump’s protectionist policy takes its toll on global economy

As the clock is ticking down to another deadline for Trump’s trade tariffs, American protectionism has been putting a strain on the global economy. Interestingly, experts have repeatedly warned about it. According to Bloomberg analysts, this reality is “becoming increasingly evident,” despite the relatively positive sentiment prevailing in financial markets.

Experts estimate that the current overall tariff level in the US is the highest since the 1930s. It is nearly six times higher than it was before Donald Trump took office in early 2025. “Companies are freezing capital expenditures, redirecting supply chains that took years to build, and cutting profits in order to absorb the shock of rising prices,” Bloomberg cautions.

The tariffs introduced under Trump’s "America First" doctrine have proven to be destructive. As a result, only a few companies have benefited, while far more businesses and citizens are bearing the brunt of this. According to Bloomberg Economics forecasts, the global economy will have incurred $2 trillion in losses by the end of 2027 compared to the period before the trade war began. However, some of these losses could be offset by restructuring production and supply chains.

“It’s becoming clear that the US president’s tariff negotiations are having a negative impact on investment, especially within the United States,” Daniel Harenberg, lead economist at Oxford Economics, said. “Even if the actual duties are lower than expected, they essentially function as a tax that disrupts supply chains and global trade.”

Nevertheless, the White House remains optimistic about the consequences for the country. The president points to record-high stock market levels and rising incomes. “Thanks to the tariffs, our economy is thriving!” the US president declared on social media in June.

Indeed, in recent months, Wall Street economists have slightly raised their forecasts for the US and are not overly concerned about an impending recession. However, most experts still predict a slowdown rather than growth.

Currently, the tariffs imposed by Trump are eroding the earnings of major American business giants such as General Motors, Dow Inc., and Tesla. “We're still far from an inflation shock, but it’s important to be prepared for such a scenario,” Bloomberg warns. Meanwhile, American consumers, the driving force of the economy, have maintained their level of spending, but are already showing signs of strain and fatigue. As for consumer spending, analysts have detected a clear-cut downtrend in 2025. “Households are worried about the effects of rising prices due to tariffs, as well as the sluggish activity in the labor market,” James Knightley, Chief International Economist at ING, emphasizes.


Share this article:
back back next
loader...
all-was_read__icon
You have watched all the best publications
presently.
We are already looking for something interesting for you...
all-was_read__star
Recently published:
loader...
More recent publications...