Despite several tariff announcements, only 10% additional 10% have become effective on China.
We are a month in the second term of President Trump, and have been a region of tariff focus.
Since there is a lot to keep an eye on, we have our trusted tariff tracker (the table below), which put all the tariffs together, proposed, enacted, delayed, solved and studied – and when they are effective Can be.
So far, only an additional 10% tariff has been impacted on China (and yesterday President Trump said that a trade deal with China is “possible”). The rest are in Limbo, and there are some questions whether the tariffs will be watered by the delay on Canada and Mexico will be watered or will be effective anytime.
Given all this uncertainty, let us focus on what we know.
1. Export matters more to other countries as they do in America
First, business is a small part of the American economy.
Overall, the export is less than 11% of the US GDP, and goods exports especially less than 7% of GDP.
But this is not a case for most other large economies.
Exports America (below chart, dark blue bars) matters more to other economies import from American case for American economy (light blue bars).
For example, Mexican exports to US One -fourth Mexico’s GDP, but Mexican imports from the US are just 1% of American GDP. For Canada, it is one fifth Their GDP vs 1% US GDP (again).
And those countries are America Most Depending on (European Union is only slightly larger as a group).
Since exports are a small piece of American economy, this limit limits the tariff, resulting in high prices and low demand. But, tariff Be able to The US has a major impact on more dependent countries on exports.
2. Tariff still matters for business patterns
Despite the potentially limited impact for the US economy, tariffs still matter to the business patterns.
In 2018, during the first term of President Trump, he applied mostly China-centric tariffs.
Since then, China’s share in China’s US goods imports has been about half (chart, red line below) – limiting the impact of tariff inflation, because companies changed their suppliers or additional cost of imports from China To reduce the supply chains to reduce.
With China’s stake falling, other countries saw an increase in their shares, as companies opted for source goods from elsewhere. Data shows that it has benefited from China’s neighbors (Taiwan, Korea, Vietnam), as well as Mexico (“passshoring”) and eurozone (“friendoring”).
The difference between the first and second terms of President Trump is that he has proposed a very broad tariff this time. If we end up with different levels of tariffs on different countries (such as 25% vs. Europe in Canada), however, it is likely that we will see the US import transferring to those countries with low tariffs, what is possible.
Given the uncertainty around the tariff, still very soon to say a lot about their impact
However, many economists and pundits hope that President Trump is used in the form of interaction for the final bilateral deals with countries. If so, the already small effect of the tariff will be even smaller. Right now, however, given the uncertainty about the final look of the tariff, it is difficult to say a lot about their accurate effect.
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