Bloomberg: Sweeping US tariffs poised to reshape global trade landscape

President Donald Trump is set to announce sweeping trade restrictions on April 1, marking the most extensive US tariff measures in a century.

These "reciprocal tariffs", according to Bloomberg, aim to counter what the administration sees as unfair trade practices, fundamentally reshaping the global trade system and introducing significant economic risks.

The White House has provided little clarity on the final structure, size, or targets of the tariffs ahead of Trump’s 4 p.m. announcement in the Rose Garden. However, administration officials have repeatedly criticized the European Union, Mexico, Canada, Japan, South Korea, Vietnam, and India. China is already facing a cumulative 20% surtax on its goods, while additional 25% tariffs have been imposed on steel, aluminum, and various products from Mexico and Canada. Trump has also signed a proclamation imposing a 25% tariff on autos and auto parts, set to take effect on April 3.

The tariffs could have far-reaching consequences, with global trade valued at $33 trillion now facing potential disruption. According to Bloomberg Economics, the new tariffs could cause exports to the US from countries like Brazil and China to fall by up to 90%. Analysts warn that an across-the-board tariff increase could add 28 percentage points to average US tariff rates, reducing US GDP by 4% and pushing inflation up by 2.5% over the next two to three years.

Goldman Sachs estimates that the average US tariff on all imports could rise by 15 percentage points this year alone, significantly increasing inflation, slowing growth, and raising the risk of a recession. Concerns over stagflation — low economic growth coupled with high inflation — are growing, with some experts comparing the situation to the 1970s oil crisis.

Trump’s approach has left global markets in turmoil. The uncertainty surrounding these tariffs has pushed US stocks to their worst quarterly performance since 2023, while US Treasuries rose nearly 3% amid fears of slower growth. The dollar has weakened, and gold prices have hit record highs as investors seek safe-haven assets.

Foreign businesses are scrambling to assess the potential impact, with some considering shifting production to the US to bypass tariffs. Many US companies have also voiced concerns about rising costs and shrinking profit margins.

While some countries are retaliating — China and the EU have already imposed countermeasures — others, such as Vietnam, are seeking to avoid conflict by increasing US imports and lowering their own tariffs.

Despite the high stakes, many details remain unclear. How high will tariffs go? Which products and countries will be hit hardest? How will US trading partners retaliate? These questions may not be fully answered in Trump’s speech, but they will define the future of global trade.

As the world waits for Trump's announcement, uncertainty prevails. John Denton, Secretary General of the International Chamber of Commerce, summed up the mood: “Clearly, the global business community looks at this with trepidation.”

By Tamilla Hasanova