Trump turned the tide in the trade war

Trump turned the tide in the trade war

President Donald Trump has dared to take a remarkable step: he increases the tariffs to some of the most important trading partners in America, and the world celebrates these agreements largely as success.

a dared step in trade policy

The introduction of historically high tariffs on imports from all over the world - especially at a time when American consumers suffer from the highest inflation of the past four decades - represents one of Trump's boldly risks during his presidency. Trump was chosen mainly due to his promise to stabilize the finances of the Americans. Economists have largely criticized his trading policy, since is expected to increase the costs for companies and consumers .

Psychology of the customs increases

But Trump went a different way than everyone else, and so far the risk seems to have been taken. He has achieved this with an old -fashioned psychological tactic: he set the bar so high for possible customs pain that everything that falls, as a profit appears.

"Trump always has a plan, but often he is not obvious," finance Minister Scott Bessent said on Wednesday morning in an interview with Bloomberg Television.

trade agreements and rising tariffs

As an example, Trump Japan threatened with an inch of 25 % in the early stages of this month when negotiations stalled. But on Tuesday, a Trade Agreement between the two nations which contains a customs rate of 15 % on from Japan into the USA. The US markets experienced a healthy increase on Wednesday. Japan's markets literally shot up.

But 15 % are more than 10 % that US importers have paid for Japanese exports since April when Trump his so-called " Reciproken tariffs had introduced - and much more than what the Japanese had paid before Trump's taking office.

The certainty of trade agreements

The analysts agree that the true victory is the security that the trade agreements offer investors, consumers and companies.

"The positive is that we hopefully get closer to the end of the ambiguities regarding customs tariffs, so that companies can plan better," said Peter Boockvar, Chief Investment Officer of One Point BfG Wealth Partners, in a message to investors on Wednesday morning. However, Boockvar admitted that we live in "a bizarre political and economic theory world."

future of trade wars

The trade war has far from being completed and the long -term effects of Trump's decisions could prove to be harmful - both economically and politically. But Trump seems to be won in the short term.

This turn began on April 9, when Trump suspended his "liberation day" duties announced the previous week for 90 days, which had heavily burdened the stock market and briefly led to a bear market area. The bond market had also shown signs to collapse-until Finance Minister Scott Bessent Trump from his highest customs level Died .

Current development and forecasts

The markets have since then the consumer mood-which sank near historical deep stalls.

Some events contributed to the calming of the fears: On April 12, the Trump administration sustained smartphones and electronics from the historically high tariffs that she had imposed on China, which led to another market swing. In mid -May, an agreement with China was achieved to significantly reduce the tariffs and open some markets that both sides had closed due to increasing tensions. The tariffs to Chinese imports fell from 145 % to 35 % - a historical value that served as an effective ban on shipping.

However, it is unclear whether Trump can already claim a victory in the trade. At least dozens of trading partners are expected to receive higher tariffs at the end of the next week, and Trump has indicated the universal customs of 10 %, which he introduced on April 2 on 15 % or 15 % or To increase 20 % . The European Union, another important trading partner of the United States, has not yet been able to achieve a trade agreement, and the tariffs could rise on both sides of the Atlantic.

The US and global economy has largely endured Trump's tariffs in the past few months, but it is unclear whether they can do this if these sentences increase- especially since US importers reduce the inventory of goods that were brought to the US

"It remains too early to understand the long-term effects completely, especially with a new round of customs developments that are expected in August," said Lynn Song, Chief Economist of ING for Groß-China, in a message to customers on Wednesday morning.

Inflation begins to rise . The business climate improves, but profit and growth forecasts remain relatively stagnating. Consumer confidence increases, but is still relatively low compared to the period before that Trump began to charge tariffs. The labor market shows some first cracks.

This is the way the market signals that the certainty of the present could quickly turn into more turbulence for the future.