“Tariff uncertainty seemingly finds a bottom, but the damage is still significant. For a very worrying moment, it felt like the sky might be the limit for US import tariffs. After a relentless escalation in the US-China tariff war, both sides stepped back from the brink – to the collective sigh of relief of the global economy. To be clear: US import tariffs are likely to remain much higher than before the 2nd Trump presidency (unprecedented in modern times), and the shock to global trade will likely still be significant. Even with trade deals to avoid even higher tariffs, we expect the 10% universal baseline tariff on US imports to stay, alongside higher rates for specific sectors like cars (with quotas at lower rates, similar to the US deal with the UK). Moreover, policy uncertainty will continue to be a significant drag on the global economy. But if there is one important thing we learned over the past month, it’s that there are limits to how far the US administration is prepared to go in implementing its radical trade agenda.”
Morten W. Langer
