Trump Tariffs: Will they bite or just bark?
Trump tariffs are coming. What sort of cataclysmic damage they will inflict on the world economy is on everyone's mind. Will there be trade wars? Will these tariffs stoke inflation? Will they severely restructure global supply chains? Would they shrink global trade and, consequently, the world economy?
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We don't know. And we won't know for quite some time. The extent of damage would depend not just on US tariff rates but also equally on how the rest of the world responds. How countries that face higher tariffs react, how exporters protect their share of US imports, how global supply chains shift in response, how exporters in countries that do not face additional tariffs respond, how the US dollar trends, and so on.
The good news is that with election fever in the US over, and having won the presidential election, Trump is now a wee bit sober. Thus, the actual damage would likely be less than what experts have been forecasting. For two reasons:
Tariff bullying Trump believes as much in the power of bullying as in action. He believes as much in the threat of tariffs as tariffs themselves. Trump 1.0 is evidence that his bark is worse than his bite. On tariffs, this appears to be the Donald mantra. Over the past two years, he has repeatedly threatened to slap between 60% and 100% tariffs on imports from China,
