Uddrag fra Unicredit:
THE CONTEXT
Yesterday evening, US President Donald Trump announced the long-awaited reciprocal tariffs on the US’s trading
partners. The US will impose a minimum 10% tariff on all countries (effective 5 April), with many countries facing
much higher “individualized” tariffs (effective 9 April). Some goods will not be subject to a reciprocal tariff but will
face their own high tariffs. These include steel and aluminium (already facing a 25% duty) and cars (for which a 25%
tariff takes effect today), among others.
THE DATA
The EU will be severely affected, with a 20% tariff on US exports. China will face an additional
34% tariff, which comes on top of the 20% already announced, taking it to a cumulative 54%.
Japan will face a 24% tariff. Mexico and Canada will continue to face 25% tariffs on their
exports to the US that are not covered by the USMCA free trade agreement. The UK will face
the minimum tariff of 10%, while Switzerland faces a relatively high 31% tariff. We estimate
the reciprocal tariffs plan takes the average (trade-weighted) tariff on all US goods imports
from 2.3% last year to about 25%, which is the highest level since 1903.
OUR VIEW
The average US tariff would rise above that seen in the 1930s, after the Smoot-Hawley Tariff
Act of 1930 imposed steep tariffs on many industrial goods, which was not a good time for the
US and global economy. The US economy back then was much less integrated into global value
chains than it is today. The rise in tariffs announced yesterday is clearly on a much greater
scale than what Trump implemented in 2018-19, when the average US tariff rose by only
1.4pp, which had minor effects on the economy (the inflationary effects were hardly discernible
at the aggregate level). The announced tariffs, if they stick, would move us towards the negative
scenario we outlined in our scenario analysis (see our Short View: “Liberation Day” tariffs: three
scenarios). The Fed will find itself in the difficult position of navigating rising inflation and
subdued economic growth.
OTHER THINGS TO NOTE
ISM Non-manufacturing Index likely to decline
We expect the ISM Non-manufacturing Index to have dropped to 52.5 in March, from 53.5
in February. Its deterioration would mimic the decrease in the ISM Manufacturing Index.
Regional Fed surveys for the services sector published so far (New York, Philly, Richmond)
showed a marked slowing in economic activity in March. In contrast, the flash S&P Global
services PMI for March rose to a three-month high of 54.3. However, historically the ISM
index has a higher correlation with the average of regional Fed surveys than the S&P Global
index.
