In his address to Congress, the president made clear that his new trade levies were here to stay, acknowledging it might create “a little disturbance.” Analysts forecast what that might look like.
“A little disturbance”
For months, the debate gripping board rooms, Wall Street and world capitals was whether to take President Trump at his word on tariffs. For a while, the markets rallied as if he were just bluffing.
He wasn’t. In an address before Congress last night, Trump said that tariffs would protect American jobs and enrich the nation. He also acknowledged that “there will be a little disturbance. But we’re OK with that.”
What might a “a little disturbance” look like? DealBook has taken on the task of gaming out what could happen next. (A warning to free-trade advocates: this could be tough reading.)
More tariffs are coming, trade experts say. Few countries, or companies, will be spared. For example, if the tariffs on Canada, Mexico and China stick, then Europe will be next. Such a scenario is “unavoidable,” George Saravelos, the global head of FX Research at Deutsche Bank, said in a research note on Tuesday. European companies are already bracing for the next wave.
“Trump has appeared to be less amenable to carve-outs in this second term,” David Seif, chief economist for developed markets at Nomura, told DealBook. That could bode poorly, he added, for Britain, whose prime minister, Keir Starmer, met with Trump at the White House last week where a trade deal was discussed. “I don’t think Keir Starmer should just feel safe right now,” Seif said.
Expect more market turmoil. “These tariffs would represent a major negative global growth shock, sufficient to push many economies into recession,” Saravelos wrote, adding that it’s time to stop thinking of them as a negotiating tactic. (The recessionary risk for the United States may be remote, but concerns are growing about the tariffs’ potential stagflationary effects.)
We are having trouble retrieving the article content.
Please enable JavaScript in your browser settings.
Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.
Thank you for your patience while we verify access.
Already a subscriber? Log in.
Want all of The Times? Subscribe.
Source: Elections - nytimes.com
