US President Donald Trump’s reciprocal tariff program is facing mounting skepticism over its future effectiveness and implementation. Initially, investors had anticipated news on tariffs but instead received a delay announcement, directing federal agencies to study them over several months.
Thursday’s market surge was attributed to relief that American trade policy would not disrupt global commerce for now. However, tariffs could lead to increased prices for US consumers and businesses as well as retaliatory measures from other countries.
UBS Global Wealth Management chief economist Paul Donovan stated that Trump’s announcement on reciprocal tariffs was a plan to investigate taxing US consumers at a future date. Many investors believe the threats of blanket tariffs are more negotiation tactics than genuine intentions.
Despite initial claims of severe tariffs for adversaries and allies alike, implementation has been more measured in practice, reflecting the delicate nature of global trade negotiations. Trump’s recent announcements on Canada, Mexico, China, and steel/aluminum tariffs have shown a mix of severity and reversal.
Macquarie global foreign exchange and rates strategist Thierry Wizman noted that there is a deceleration of the ‘tariff train,’ with an emphasis on transactional rather than punitive approaches. The White House has not commented on the delay.
The US government’s renegotiation efforts continue, with Indian Prime Minister Narendra Modi pledging to reduce tariffs on some US goods in exchange for increased oil and gas purchases and defense equipment from American firms.
Not all trade discussions between the US and its allies have been smooth, and there have been instances where threatened tariffs did not materialize. Trump has hinted at using tariffs as a means of securing foreign policy concessions, but the impact of inflation on his policies remains uncertain.
Source: https://fortune.com/2025/02/14/trump-tariffs-us-trade-policy-economy-canada-mexico-india-reciprocal-duties