Sowing seeds of recession

In much the same way as in the 1930s, which saw the Great Depression, US President Donald Trump's tariffs threaten to destabilize the global economy by sowing the seeds of recession.

- BISWAJIT DHAR

The volatility seen in stock markets worldwide is a good barometer of the economic uncertainties that President Trump's unilateralism has introduced. Expectations are rife that global growth will decelerate in 2025, with investment banks, Goldman Sachs, and JP Morgan, predicting that the US will slide into a recession before the end of the year.

These predictions remain despite the 90-day postponement in the implementation of "reciprocal tariffs", after Trump took the most extraordinary step last week of imposing "reciprocal tariffs" on 57 trade partners on April 2.

However, in the case of China, which had announced the imposition of retaliatory tariffs of 34% on all products imported from the US, Trump announced an increase in "reciprocal tariff" twice within 24 hours, initially from 54% to 104%, and then to 125%.

Trump has now clarified that he has raised tariffs on Chinese goods by a total of 145% since taking office.

This marks one of the darkest times in trade diplomacy, with the two largest economies engaged in a tit-for-tat tariff war that can throw the global economy off the cliff.

It is almost impossible to argue that Trump's decision to postpone implementing "reciprocal tariffs" is a "relief" provided to the targeted countries because tariffs are central to the trade policy that he has been pursuing since his first term in office.

The 56 countries (other than China) on whom the tariff burden is sought to be increased must consider Trump's decision to postpone the implementation of these tariffs to better prepare themselves.