Tariffs of 10% can still wreak havoc

The blanket tariffs, now considered low after recent events, still threaten to harm world trade and make everything more expensive for everyone, writes Patricia Cohen from London

- 

For or against radical the idea was.

Alarms sounded about higher inflation, lost jobs, slower growth or recession. The prospect seemed so outlandish that most economists and Wall Street analysts who clamored for the possibilities tended to treat a 10% tariff simply as a bargaining tool.

Now, after a rapid-fire series of announcements from the White House that promised, imposed, reversed, delayed, decreased and increased tariffs, the 10% solution is looking like the most temperate choice rather than the most revolutionary, especially now that a trade war between China and the United States is thawing.

Yet 10% tariffs have not lost their sting. At that level, universal tariffs still hit more than 10 times as many imports as the ones targeted during Trump’s first term, and are significantly higher and broader than anything the United States has tried in more than decades.

The tariff rate is “quite extreme,” said Carsten Brzeski, chief eurozone economist at ING, a Dutch bank. “It still brings us back to levels last seen during the 1930s.”

In addition to measures targeting China, Trump powered up a long list of punishing steps — including a flat 10% tariff on most imports — in an April 9 (For the US customer, it means everything is going to become more expensive,” Mr Brzeski said.