The uncertainty surrounding US trade wars deepened on Tuesday ahead of President Donald Trump’s expected announcement of “reciprocal” tariffs on America’s trading partners.
Just a day before Trump’s planned tariff declaration, referred to as “Liberation Day,” crucial details remained unclear. Questions lingered about which nations or products would be affected and how steep the new tariffs might be. According to a report from The Washington Post, citing sources familiar with the discussions, the tariffs could reach as high as 20% and cover a vast range of goods.
On Monday, Trump reaffirmed that the new tariffs would be “reciprocal,” targeting countries that impose trade barriers against U.S. exports. However, he suggested they would be lower than the tariffs imposed by those nations, hinting at a more selective strategy rather than a blanket 20% duty.
Recent weeks have seen financial markets fluctuate sharply in response to shifting reports about Trump’s trade policies. Markets tumbled amid speculation that the tariffs would be broad and severe but rebounded when indications suggested a more restrained approach. These new tariffs would add to existing levies against China, Canada, and Mexico, as well as tariffs on steel, aluminum, and the newly announced 25% duty on imported vehicles.
US Trade Wars: Economic Uncertainty and Market Reactions
“The lack of specifics from the White House is keeping businesses, investors, and foreign governments in a state of suspense,” noted Matt Colyar, an economist at Moody’s Analytics. “Some of this is likely intentional, as the anticipation accelerates negotiations between the administration, industry leaders, and foreign governments. However, the complexity of the issue and the possibility that a well-defined plan won’t be ready by Wednesday also contribute to the vagueness.”
Trump argues that these tariffs will safeguard American industries from foreign competition, encourage domestic manufacturing, increase government revenue, and secure improved trade agreements with other nations. However, some trade analysts caution that these measures may drive up consumer prices and potentially push the economy toward a downturn.
US Trade Wars: Impact on Jobs and Manufacturing
Meanwhile, the uncertainty over trade policy is already creating economic ripples, as highlighted by two key reports released on Tuesday. The Bureau of Labor Statistics revealed that businesses slightly reduced job openings in February while awaiting clarity on trade policies. Additionally, the Institute for Supply Management reported that manufacturing activity slowed in March, while its index tracking costs for manufacturers surged to its highest level since June 2022—largely due to Trump’s tariffs on steel and aluminum.
As the world waits for further details, the ongoing US trade wars continue to shape global economic discussions, leaving investors, businesses, and consumers on edge.
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Source: www.investopedia.com
