Donald Trump, who is running again for the office of US president, is considering imposing tariffs on all imported goods. This would also have a major impact on the financial markets, as it would shake up all asset classes, warns a strategist.
• Trump is considering a 10 percent import tariff on all US imports
• Rabobank strategist warns: Trump wants to structurally break the global system
• Profound effects on stocks, bonds and the like are also feared
Already in his first term in office Donald Trump A trade dispute has been started not only with China, but also with many of America’s allies, such as Japan, Great Britain and the EU. If he returns to the White House in the next election on November 5th, he could disrupt global trade on an even greater scale, as he said in an August 2023 interview with Larry Kudlow of Fox Business He discussed a universal base tariff of 10 percent on virtually all imported goods.
“I think we should put a ring around the neck of the US economy,” Trump said in the interview. “When companies come to the United States and dump their products, they should automatically pay a tax of, say, 10 percent… I like the 10 percent for everyone.” He continued: “It’s not going to stop the economy because it’s not that much,” Trump said, “but it’s enough that we really make a lot of money.”
Rabobank strategist warns about Trump’s tariff plan
Markets should begin to grapple with this plan and its structural implications, urges Michael Every, global strategist at Rabobank. After all, Trump is currently the clear favorite for the Republican presidential nomination and, in his opinion, the markets “would not be surprised” by a possible Trump presidency, as was the case in 2016.
On CNBC’s “Street Signs Asia,” Every said one of investors’ biggest concerns is Trump’s 10 percent tariffs on all U.S. imports. On the one hand, market participants would not be able to estimate the effects, and on the other hand, they would not understand why Trump is even talking about a ten percent tariff.
“He’s talking about structurally breaking the global system by hook or by crook to basically reindustrialize the US in a neo-Hamiltonian way, just as the US was originally industrialized by putting up a barrier between it and the rest of the world, “so that if you import into America, it’s cheap to produce in America and more expensive to produce anywhere else,” Every explained on the television show, warning that a return to this type of trade policy “shocks every asset class – stocks, currencies, Bonds, whatever – everything gets put in a box and shaken up, so markets should start thinking about that.”
Warning from think tanks
According to CNBC, there has been criticism of these tariff plans from various quarters. Among other things, the center-right think tank American Action Forum warned of the serious consequences: In the most likely scenario in which trading partners take retaliatory measures, the new tariffs would “distort global trade, slow economic activity and have far-reaching negative consequences for the U.S. have an economy”. Specifically, the experts at the American Action Forum fear a decline in US GDP of 0.31 percent and a decline in prosperity in the US of $123.3 billion.
According to The Washington Post, there was also criticism from the Peterson Institute for International Economics. Accordingly, the president of the Washington think tank described Trump’s idea as “madness” because the world’s other major economies would then come to the conclusion that the United States could not be trusted as a trading partner. Instead of boosting domestic production as hoped, a 10 percent tariff will hurt thousands of import-dependent U.S. companies while also hurting thousands of U.S. companies dependent on foreign exports.
Editorial team finanzen.net