US President Donald Trump has reinstated and expanded reciprocal tariffs on most countries, with most taking effect on August 7. The new tariffs follow a week-long pause in April, which replaced the initial plan of reciprocal tariffs announced by the president.
The revised tariffs impose significant costs on both US consumers and businesses, particularly those reliant on imported goods. A global model of goods and services markets estimates that the tariffs reduce US annual GDP by 0.36%, equivalent to $108.2 billion or $861 per household annually.
The impact is not limited to the US, with most other countries experiencing significant reductions in GDP due to the additional tariffs. Switzerland’s economy faces the largest decline, with a 0.47% drop in GDP and a loss of $1,215 per household.
Despite these negative effects, some countries benefit from the revised tariffs. Australia and the United Kingdom gain from lower tariffs, while New Zealand experiences a smaller impact due to competing exports with Australian commodities that face even lower tariffs.
The reinstatement of reciprocal tariffs marks a significant shift in US trade policy, with many markets buoyant at the prospect of higher tariffs. However, experts warn that this could lead to a rocky road ahead for global trade, as inventories and stockpiles dwindle.
Source: https://theconversation.com/new-trump-tariffs-early-modelling-shows-most-economies-lose-the-us-more-than-many-262491