Dan Steinbock
US tariff wars have begun, broadening from US’s biggest trade partners to huge industry sectors, the EU and the entire world. The stakes are now global.
After the first Trump tariffs targeted the big US trade partners – Mexico, Canada and China – tariff threats are shifting from steel and aluminum to computer chips and pharmaceuticals, the European Union; even the world.
The US also has a major trade deficit with multiple trading economies, including Germany, Japan, South Korea and Vietnam, which are likely to be next in the firing line.
Tariff is a tax levied on imported goods and services. Yet, the Trump administration has shuffled aside concerns about these levies fostering inflation or snarling global supply chains. That’s a serious mistake. In the US, wholesale prices are already rising on higher food and energy costs, adding to the growing pile of bad inflation news ahead of more US tariffs. Internationally, these risks are real, costly, and huge.
China’s stabilizing economy
As the tariff wars begin, China’s economy has showed progressive signs of stabilization since the fourth quarter of 2024, as the impact of the November stimulus measures has kicked in. In the period, growth accelerated from 4.6% to 5.4% with annualized 5.0% last year. Hence, too, the recent upgrade of China’s GDP growth by the International Monetary Fund.
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