Trump's Tariff Turbulence Is Worse Than Anyone Imagined

Even his concessions are less generous than expected.

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Keeping abreast of US President Donald Trump's utterances on tariffs, from actual announcements to vague threats, is a dizzying task. One day he is set on wrecking the integrated North American economy; the next he wants to appease carmakers that depend on it. When it comes to China, he veers between slapping ever-larger levies on its goods and hinting at a desire for a giant trade deal. As for other countries, he speaks ominously of big but so far unspecified tariffs that will soon kick in.

It would be comical were the consequences not so grave, both for America and the rest of the world. In the run-up to 2024's presidential election, as businesses grappled with the uncertainties of Mr Trump's trade agenda, analysts examined different scenarios. The most bearish focused on his suggestion that he might impose universal tariffs on all goods entering America. Moody's Analytics, a data outfit, reckoned such levies could reduce America's gross domestic product by nearly 3 per cent relative to its projected path by 2026—a decline that would almost certainly mean a recession. The blows to large exporting countries, notably China and Mexico, would be even bigger, it calculated.