Experts Call Tariff Tsunami a Turning Point for the Global Economy

Experts are calling Trump's plan a "tsunami" that will hit the global economy, noting that its potential consequences are difficult to predict.

"This is a turning point not only for the US economy, but for the global economy. Many countries are likely to end up in recession," says Olu Sonola, HEAD of US economic research at Fitch Ratings.

"If these tariffs are in place for a long period, you can just throw out most of the forecasts," Market Watch quotes Sonola as saying.

As reported, Trump announced on Wednesday his decision to introduce retaliatory tariffs against US foreign trading partners. At the same time, he explained that the US tariffs "will not be completely mirrored" and showed a table indicating what tariffs are in effect on average against the US in other countries, and what is being introduced in response.

Thus, according to the table, in CHINA, tariffs on US products average 67%, and US retaliatory tariffs will be at 34%. Tariffs in the EU are estimated at 39%, and retaliatory tariffs at 20%. Japan's tariffs are 46%, while the US's retaliatory tariffs are 24%.

Trump said he had set a base tariff floor of 10%. The White House said it would come into effect on April 5, with higher tariffs coming on April 9.

Economists' calculations show that the average tariff rate in the US will be around 22%, which was last recorded in 1910, Market Watch writes.

"Trump has effectively declared war on the global economy," says Maurice Obstfeld, former chief economist at the International Monetary Fund. "This will have global devastating consequences and will obviously hit the US economy hard. By imposing different tariff rates on different trading partners, he is creating chaos in global trade."

ING economists called the measures announced by Trump "Europe's worst economic nightmare come true," noting that "much remains unclear, and it is almost impossible to fully assess the impact of the 'tariff tsunami.'"

The US president hopes that raising import duties will attract more funds to the budget and encourage companies to move production to the US. However, economists warn that in the near term his steps will lead to increased inflation in the US and a weakening of the economic growth rate, and possibly to a recession.

The steps announced by Trump mean "a painful transition period ahead", says James Knightley, chief economist for international markets at ING.

According to his estimates, the new duties will add $1,350 to the annual expenses of each American.

Under Trump's decision, tariffs on imports from Vietnam, where manufacturers of clothing, furniture, toys and other goods have been actively moving production in recent years, will amount to 46%. This will lead to higher costs for consumer goods manufacturers, which they will likely pass on to consumers. In 2024 , the volume of American imports from Vietnam amounted to $136.6 billion, an increase of 19% over the year.

The likely increase in prices will reduce disposable incomes of consumers, which will affect the pace of economic growth and the labor market in 2025, notes Bill Adams, chief economist at Comerica Bank.

Many experts emphasize the persistence of significant uncertainty, including regarding how long the high tariffs will remain in place.

"The huge tariff rates imposed on various countries scream that this is a negotiating tactic," says Adam Hetts, an analyst at Janus Höndersone Investors. "All of this will keep markets on edge for the foreseeable future."

"Fortunately, this means there is significant room for maneuver in terms of tariff reductions," Market Watch quotes the expert as saying.