Faced with a treasury market rout, Trump blinked and halts reciprocal tariffs on 75 countries who did not retaliate while raising China tariffs to 104%. In response China raised its tariff rate to 84%.
Key impacts are:
The US looks completely incompetent (lets rephrase that – they are completely incompetent).
The tariff war with China is still in full swing and this is 43% of global GDP. The two trading partners are effectively not trading any more. This will still have a massive impact on global trade and will flow through to the UK.
There is still 10% tariff on all countries, and this means the UK, a free trading nation is being dealt with the same as all other countries seen by the US as being discriminatory.
The EU announced their retaliatory tariffs yesterday so are ready to fight should it be needed (another reason Trump backed down).
Its an utter mess.
As with everything Trump, it is still unclear what will happen next. This leads to uncertainty and a chilling effect on the global economy, will reduce investment, will raise prices and inflation, lose people jobs and affect people’s lives in the real world.
I wonder how many republicans made a sack of cash from insider trading yesterday. Adam Schiff (D) has raised this question.
The ‘golden lettuce award’ is being dusted off by Truss to give to someone she really admires. But its too much to hope that the Republicans will get rid of Trump so the award will need to stay in the closet for the time being.
Finally long term it will bounce back on the US. The US is seen as unreliable even by countries which were once considered its allies. This will flow through on trade and defence for a long long time to come the world will continue to trade and have alliances, just without the US in the inner circle.
Globally $10Tn lost in 2 days.

Art of the deal…

Speaking of the ongoing trade war between the United States and China, you might be interested in learning more about the **Bilateral Trade Agreements**, which have been a cornerstone of international trade policy. Bilateral Trade Agreements provide a framework for countries to negotiate trade terms directly, often excluding other nations. Additionally, understanding the **Trump administration’s trade policies** can give you deeper insight into the current context. Trump administration’s trade policies have been a significant factor in the recent tariff fluctuations.