Trump's Tariff Policy: How New Tariffs Could Lead to a Global Recession

The global economy is on the verge of its third recession in two decades, which could be the result of a new tariff policy initiated by US President Donald Trump. This warning is being spread among economists who point to the serious consequences of the introduction of tariffs, which could negatively affect global trade and economic stability.

According to Axios, the tariffs introduced by Trump include a basic duty of 10% on imports of goods into the US from all countries, which will also apply to Ukraine. For other countries, such as the EU and Moldova, the rates will be higher: 20% and 31%, respectively. The decision takes effect on April 9, 2024 and also covers Australia, the UK and Brazil. However, according to the US administration, there is a possibility of negotiating changes to the conditions for individual countries.

Economists warn that if these tariffs remain in place and other countries respond with appropriate measures, it could trigger a global economic downturn that would rival the magnitude of crises such as the 2008-2009 financial crisis or the COVID-19 pandemic. Mark Zandi, Moody’s chief economist, notes that this would lead to a significant economic downturn, and according to estimates from the Yale Budget Lab, the imposition of a 20% tariff alone and similar actions by other countries could reduce the purchasing power of the average American household by $ 4,200 per year.

The situation in the American manufacturing sector is also worrying. So, while in theory the tariffs should have stimulated this sector, in practice factories have not responded positively. The latest economic data shows that economic activity is weakening, and this could have serious consequences for the US and global economies.

Economists are particularly concerned about the uniqueness of this recession, as it will be the first to be caused solely by the White House administration. Economist Catherine Edwards notes that while recessions are usually caused by a complex set of factors that take time to develop, the impact of tariffs can be felt almost instantly.

The effects of these changes are already being felt in financial markets, with U.S. stock futures plummeting and global markets reacting negatively to the Trump administration’s new trade measures. However, the White House insists that the tariffs are only part of a broader economic strategy that also includes deregulation and government spending cuts to stimulate the economy.

However, even if they are part of a strategic plan, many economists believe that such steps could have long-term and profound consequences for the global economy, especially if most countries respond to these measures with appropriate trade restrictions. The recession caused by such decisions could pose a serious challenge to global stability and economic development in the coming years.