By MARK JOHN, FRANCESCO CANEPA AND LEIKA KIHARA
LONDON/TOKYO- The latest round of US trade tariffs unveiled on Wednesday will sap yet more vigour from a world economy barely recovered from the post-pandemic inflation surge, weighed down by record debt and unnerved by geopolitical strife.
Depending on how President Donald Trump and leaders of other nations proceed now, it may also go down as a turning point for a globalized system that until now had taken for granted the strength and reliability of America, its largest component.
“Trump’s tariffs carry the risk of destroying the global free trade order the United States itself has spear-headed since the Second World War,” said Takahide Kiuchi, executive economist at Nomura Research Institute.
But in coming months it will be the plain and simple price-hiking – and therefore demand-dampening – effects of new levies applied to thousands of goods bought and sold by consumers and businesses across the planet that will prevail.
“I see it as a drift of the US and global economy towards worse performance, more uncertainty and possibly heading towards something we could call a global recession,” said Antonio Fatas, macroeconomist at the INSEAD business school in France.
Speaking in the White House Rose Garden, Trump said he would impose a 10 percent baseline tariff on all imports and held up a chart showing higher duties on some of the country’s biggest trading partners, including 34 percent on China and 20 percent on the European Union.
A 25 percent auto and auto parts tariff was confirmed earlier. Trump said the tariffs would return strategically vital manufacturing capabilities to the United States.
Under the new global levies imposed by Trump, the US tariff rate on all imports jumped to 22 percent – a rate last seen around 1910 – from just 2.5 percent in 2024, said Olu Sonola, head of US economic research at Fitch Ratings.
“This is a game changer, not only for the US economy but for the global economy,” Sonola said. “Many countries will likely end up in a recession.”
IMF Managing Director Kristalina Georgieva told a Reuters event this week she did not see global recession for now. She added the Fund expected shortly to make a small downward “correction” to its 2025 forecast of 3.3 percent global growth.
But the impact on national economies is set to diverge widely, given the spectrum of tariffs ranging from 10 percent for Britain to 49 percent for Cambodia. – Reuters
