The analysis of Trump’s tariff policy is summarized as follows:

• Despite some spike in volatility in major stock markets and commodity price volatility, global financial markets have proved resilient.
• Nations, international business and industry, and some sectors of the international economy will adapt to the new realities of international trade.
• Several countries, MNCs and international companies will face potential supply chain disruptions at some point.
• The extent to which Trump’s tariffs will have a long-term impact will depend on upcoming negotiations and a possible diplomatic agreement between the countries involved.

 

In general, a prolonged tariff policy may lead to the following consequences: fragmentation of the global economy with the formation of regional economic blocs, new economic partnerships and new international supply chains; weakening of international financial and economic institutions and their role in multilateral trade mechanisms; growth of economic nationalism and protectionist measures; radical transformation or total reconfiguration of the international trade and economic system.

 

* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.