Trump's Taxes Jeopardize The Global Economy

Wall Street stumbles, Asia falters, and investors hold their breath. By imposing new tariffs, Donald Trump shakes up the global economic chessboard once again. A calculated strategy, but at a high risk!

An immediate shock to the financial markets

The announcement by Donald Trump to impose a universal tax of 10% on all imports triggered an immediate reaction from financial markets. The proof: the stock indices plunged.

• -2.7% for the Dow Jones
• -3.9% for the S&P 500

Asian stock exchanges also suffered: the Hang Seng lost 9.4% and the Nikkei 2.8%.

Despite these upheavals, Trump remains inflexible. According to him, the plunge in the markets is a necessary medicine to correct global trade imbalances.

Good to know:

The new tariffs particularly affect China (34%) and Vietnam (46%). According to experts, this is likely to disrupt global supply chains.

• Vietnam, which benefited from the relocation of American companies after the previous trade war, proves particularly vulnerable.
• Experts also fear retaliatory trade measures from China.

This could worsen tensions and further disrupt international trade.

A political strategy that could plunge the global economy

Behind these new taxes, Trump defends a policy of economic and trade rebalancing. Yet, the consequences for the American and global economy are already apparent.

The increase in tariffs is likely indeed to lead to inflation in imported goods. Moreover, experts predict a considerable reduction in the purchasing power of American consumers. That’s not all! American companies that rely on importing goods also risk seeing their production costs rise.

In this sense, Bill Ackman warns of a “nuclear economic winter”. This renowned investor advocates for a suspension of tariff increases. If the trade war intensifies, it could indeed lead to a global recession just as signs of an economic slowdown are multiplying.

As Trump presents these new taxes as a necessary adjustment to restore trade balance, they risk seriously disrupting the global economy. The coming months will be crucial to assess whether this trade policy will not provoke a greater evil.