The uncertainty for the economic consequences of the tariffs imposed by the president Donald Trump He did nothing but grow this Wednesday, with the markets in free fall due to the warnings of the US Federal Reserve on a possible increase in inflation.
From his return to the White House in January, the Republican tycoon launched a commercial war against allies and rivals that the world economy has rough. China took the worst part, with additional 145% rates for its products, so it responded with 125 percent tariffs.
In the middle of the earthquake, Trump He remained optimistic on Wednesday when publishing on social networks that there was an “important progress” in the conversations he holds with Japan about a commercial agreement to moderate his taxes.
The envoy Japanese to Washington He said after the first discussions – from which Trump himself participated – that the United States wants to reach a pact in the next 90 days.
Japan’s prime minister Shigeru Ishiba, recently said that the dialogue with Washington “will not be easy” but Trump “expressed his desire to give him the highest priority.”
Trump is confident that his strategy, which aims for tariffs to lead to pacts with several countries, reduce barriers to US products and move world manufacturing production to the United States.
However, the strip and loosen between Washington and Beijing, its main economic rival, is exacerbated and with it the concern for a generalized disturbance.
The chief of the Fed (Central Bank), Jerome Powellhe warned Wednesday that it is “very likely” that Trump’s tariffs cause a temporary rise in prices in the United States, whose effects “could be more persistent.”
He also highlighted the “volatility” that plagues markets in a “moment of great uncertainty.”
Such instability was palpable during the Day on Wall Streetwhere the Nasdaq technological index collapsed at a time more than 4%, the expanded S&P more than 3%and the industrial Dow Jones above 2%.
At the head of the descents was the giant of the Nvidia semiconductors, which fell momentarily more than 10% after revealing that the new American restrictions on the export of chips imposed as part of Trump’s struggle with China will cost him billions.
The head of the World Bank, Ajay Banga, also echoed Powell and warned that “uncertainty and volatility are undoubtedly contributing to a more cautious economic and business environment.”
“Stop threatening”
While the rest of the world obtained at the moment a universal tariff of 10%, China urged the United States on Wednesday to “stop threatening and blackmail” after the White House transferred to Beijin the responsibility of starting a negotiation.
“There is no winner in a tariff war or in a commercial war,” said Lin Jian, spokesman for the Ministry of Foreign Affairs. “China does not want to fightbut he is not afraid to fight. “
Despite this dispute, the Chinese economy grew 5.4% in the first quarter. The result, better than expected, does not yet reflect the effects of the tariff climbing launched in April.
But Heron Lim, from Moody’s Analytics, told AFP that the impact would feel in the second quarter, when the levies begin to “prevent Chinese exports and stop investment.”
The general director of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, considers that the uncertainty caused by US tariffs “threatens to stop world growth, with serious negative consequences for the world and, in particular, for the most vulnerable economies.”
According to the annual WTO forecasts, world goods of goods could suffer volume drops of up to 1.5% in 2025.
Symbol of the impact for the public, the Chinese online sales platform Shein announced to its customers that it will increase its prices since April 25 “because of the recent changes in the world trade rules and on the levies.”
Japan, test case?
After Japan, the arrival in Washington of Delegations of South Korea and Indonesia.
South Korea, one of the main exporters of semiconductors and cars, reported that its Minister of Finance, Choi Sang-Mok, will meet next week with Treasury Secretary, Scott Besent.
For Stephen Innes, by Spi Asset Management, conversations with Japan will work as an “alert sign.”
“If Japan reaches an agreement, even halfway, the model will be ready. If they go empty, prepare. Other nations will begin to put a price on the confrontation, not to cooperation,” he wrote in a bulletin.
Although it is popular among Republicans, the tariff war is politically risky for Trump at home.
The governor of California, the Democrat Gavin Newsom, announced that he will launch a new judicial action against Trump’s authority to unilaterally promulgate tariffs, who have created economic chaos, triggered prices and harmed the State, families and companies. “
