Economic vandalism

With Donald Trump having delivered a seismic shock to world trade, and then “back-flipped,” the benefit of a adopting a “cool head” has never been more apparent.

March was challenging for markets with investors having to deal with an ever-evolving trade situation. After a month-long pause, Donald Trump’s 25% tariffs on imports from Canada and Mexico came into effect early in the month, before exemptions were granted only a few days later. There was no such reprieve for China which saw doubling of tariffs to 20%. All three nations responded with retaliatory measures and tariffs of their own. The auto sector was also granted a temporary reprieve. Sector specific tariffs were also implemented or proposed. 
With April underway, Trump delivered a seismic shock to world trade with “reciprocal” tariffs on over 180 countries. Trump announced a “baseline” tariff of 10% and a sliding scale of tariffs, which his administration sees as representing half of what trading partners are charging the US (it is worth noting this includes VAT/GST which does not single out the US). Notably Canada and Mexico are not caught by the new arrangements provided they comply with the USMCA agreement.

The table of economic vandalism