Trump's punitive tariffs: The global economy on the abyss of the crisis?

Trump's punitive tariffs: The global economy on the abyss of the crisis?

On April 6, 2025, US President Donald Trump announced far-reaching punitive tariffs against almost all trading partners on the "Day of Liberation". The aim of these measures is to devalue the US dollar and to promote the Rein industrialization of the United States. Consultant Elon Musk has spoken out for the creation of a zero-inch free trade zone between the USA and Europe, but the current tariffs cause massive unrest in the domestic economy and global uncertainty. Trump's undertaking could affect economic development to numerous countries and also heat inflation in the USA

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Already on Tuesday, April 8, exports from Canada and Mexico are subject to penalty tariffs of 25 percent. Trump also doubled the import duties on goods from China to 20 percent. This decision has conducted reactions directly to be opposed; Canada plans to tariffs of 25 percent on US products, which initially be $ 30 billion and should increase to $ 155 billion within 21 days. China, on the other hand, has announced that it can collect tariffs on agricultural products from March 10th.

global reactions and effects

The global reactions to Trump's customs policy are consistently negative. China plans comprehensive retaliation measures, and the EU Commission has already promised measures to consider Trump's tariffs as a threat to the global supply chain and economic stability. The association of the automotive industry in Germany was concerned about the consequences of higher Trump-Zölle on Mexican exports, especially for the German automotive industry. For Germany, a decline in gross domestic product is forecast by 0.4 percent by 2026, which also correlates with a possible shrinkage of the global economy.

economic experts warn of a trade war that could be the same as the 1930s global economic crisis. Roberto Azevdo, former director of the world trade organization, recalled the catastrophic events that were triggered by the Smoot Hewley College Act. The law led to a dramatic decline in international trade and encountered great depression. Carsten Brzeski from ING Bank also sees parallels and realizes that protectionist measures are never the solution to economic problems.

economic consequences and uncertainties

economists worldwide are concerned about Trump's outlook and warn of long -term negative consequences. Trump's consultant Stephan Miran sees the overvaluation of the US dollar a cause of the current account deficit and urges a coordinated currency adjustment, which he calls "Mar-A-Lago Accord". However, the geopolitical conditions have changed fundamentally since the 1980s, which significantly complicates such cooperation. Experts also emphasize that the tariffs could not achieve the hoped-for effects on the competitiveness of the US industry.

In the meantime, it remains to be seen how Trump's customs policy will affect US economy and international relationships. The uncertainties are currently higher than during the Corona pandemic or the 2008 financial crisis, which becomes clear in the Economic Policy UncertaAnty Index. It remains to be hoped that the upcoming developments in the political and economic landscape will not result in a comprehensive trade crisis that could continue to destabilize both the United States and the rest of the world.