Description: Trump’s 02 Apr announcement on global tariffs plunged world economies into a tailspin with some threatening to retaliate while others are still seeking trade resolutions through negotiations. China, Taiwan, Canada and the European Union have vowed to retaliate in kind, as officials stated that US tariffs were a unilateral measure which would inflict economic damage that wouldn’t benefit anyone. Other countries such as Japan, Mexico, the UK and Australia have initially responded by requesting trade negotiations which would balance out trade deficits with the US. Markets also responded negatively, marking their largest losses in years while larger financial institutions such as Dow Jones, Goldman Sachs and UBS warned of higher recession probabilities, which was complemented by losses that ranged from 1.5% to 2.6%. Goldman Sachs raised the recession probability in the US from 20% to 35% as investors turned to buying gold as the most stable asset in volatile market conditions.
Impact: Trump’s imposition of global and country – specific targeted tariffs marks a significant transference in US foreign policy which is oriented towards conservatism and isolationism rather than globalism. Such global disruptions of traditional trade and economic flows could cause considerable geopolitical fluctuations. The US’ exemption from global influence facilitates a power vacuum incentivized by market volatility which could contribute towards larger conflicts across the world, cause severe humanitarian and security crises and influence spheres such as arms and nuclear race and rapid critical natural resources competition. Countries are yet to determine short to mid – term concise steps regarding the tariffs which in the long – term would impact future shift in strategic alliances, changing the global power dynamics as the world enters an era of transformation to novel geopolitical volatility.