The impact of these rates on the world economy will be enormous.
They can be measured by the lines on a graph of American tariff income which jumped at levels not observed in a century – beyond those observed during high protectionism of the 1930s.
Or in the upcoming stock bloodbath, especially in Asia.
But the real measure of these changes will be significant changes in the long -standing global trade routes.
Will Europe, including Germany and the United Kingdom, continue to send millions of luxury cars to the United States?
Will Great Britain and Ireland be able to export billions of pharmaceutical products with these tariff levels?
Will Vietnam and Cambodia be able to exchange clothes and electronics with the United States, after being accused of being essentially a front for China?
In its heart, it is a universal price of 10% on all imports in the United States for everyone, coming on Friday evening. In addition to these dozens of “worst offenders” will be invoiced reciprocally to have trade surpluses.
The prices on Asian nations are really remarkable. They will break the commercial models of thousands of companies, factories and perhaps entire nations.
Some of the supply chains created by the largest companies in the world will be broken instantly. The inevitable impact will surely be to push them to China.
Is it just a great negotiation? Well, the US administration seems to claim pricing income for the tax reductions provided. The scope of the rapid setting seems limited. As an official of the White House said it frankly: “It is not a negotiation, it is a national emergency”.
The purpose of politics is to bring back the American trade deficit “to zero”. It is a total rewriting of the global economy.
But changing factories will take years. Prices on this scale in East Asia, especially at 30 or 40%, will increase the prices of clothes, toys and electronics much faster.
The question is now how the rest of the world reacts.
Some consumers in Europe have opportunities to benefit from a cheaper diverted trade in clothing and electronics. Apart from a number one global economy inward, the rest of the major economies can choose to integrate trade more closely.
As Tesla sales can illustrate it, only part of this story concerns the response of governments. Nowadays, consumers can also fight back. It can be a new type of social media trade war.
Does Europe want to continue to buy the consumer brands created in the United States and loved around the world?
Does the world continue to accept a monopoly in the provision of social media services by Big Us Tech?
Do American consumers want to pay the prices of basic products?
Will American authorities increase interest rates to combat the inevitable increase in inflation?
A disorderly world trade war seems inevitable.
