Donald Trump announced a wide range on global trade tariffs in the White House rose garden on Wednesday.
It was classic Trump.
Running slightly late, keeping everyone watching like some weird economic game show, he finally revealed ‘the scores on the doors’.
Or in this case, the tariffs on the placard. It certainly was an innovative way to announce what amounts to the wholesale unravelling of global trade.
Some countries will have watched this bizarre outdoor press conference with horror, as it was revealed they will face huge penalties for sending their goods to America. China for example faces an additional 34% tariff, which, when added to the two lots of 10% already announced, pushes their trade barrier above 50%, making it extremely challenging to do business with the United States.
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Just think about how many products come from China: from phones to pens, hammers to table lamps, the result of this new rule will inevitably be a hike in prices for ordinary products which Americans until now have become accustomed to buying on the cheap.
In a sense, that is the point. Trump wants his people to buy American drills and American biros. The problem is that they all have a higher price, because of the higher labour and production costs in the US.
Trump unveils trade tariffs during Wednesday's press conference. Credit: AP
The cost of living crisis was a major part of the election campaign that swept Trump to victory last November. Last night, he appeared to supercharge that crisis, with tariffs that will hurt ordinary consumers by making the things they buy more expensive.
However, this Liberation Day event is much bigger than just the American economy. It will send a jolt of fear through global markets, as they anticipate further trade barriers being erected in response.
The British government may feel relieved that the UK only faces a 10% tariff, half that imposed on the EU, but it is still a further impediment to trade and growth, which will harm our prospects.
Donald Trump spoke to a crowd of close supporters and press in the White House's rose garden. Credit: AP
For half a century, free trade and globalisation have lifted millions of people out of poverty and reshaped entire nations. Think of the transformation of countries like China or South Korea. It has come at a cost to American manufacturing though, and this is what is driving Donald Trump with an almost messianic zeal.
He has repeatedly promised to bring back jobs and industry, which have been hollowed out in places like Pennsylvania. The problem is his tariffs are not accompanied by any coherent industrial strategy - instead he is dismantling the plans put in place by Joe Biden which saw the economy grow and unemployment fall.
Now, America and the world are facing slowing growth, falling stock markets and potentially a global trade war which will hurt every country.
America First is a good slogan, but it’s going to cause economic turmoil, with many wondering where it will end. Tax cuts are promised by President Trump, but Americans are going to need it, to compensate for the higher prices they’ll soon be paying.
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