Trump’s New Tariffs Shake Global Trade, Spark Fears of Recession

Trump’s New Tariffs Shake Global Trade, Spark Fears of Recession

Business

President Donald Trump’s latest tariffs on Canada, Mexico, and China are expected to disrupt global trade and accelerate protectionist policies. The move marks a shift toward a new era of globalization defined by economic nationalism and rising technological competition, CE Report quotes Anadolu Agency

The U.S. will impose 25% additional tariffs on imports from Canada and Mexico, 10% on Chinese goods, and 10% on Canadian energy imports, effective after midnight EST on Tuesday. The total value of affected imports is estimated at $1.4 trillion.

Deutsche Bank warns this could be the biggest shock to global trade since the collapse of the Bretton Woods system in the 1970s, with potential recessionary consequences for impacted economies. Analysts predict Canada and Mexico could face a downturn worse than Brexit’s impact on the UK.

London-based Capital Economics calls the tariffs “the first strike in a potentially destructive global trade war,” predicting additional U.S. tariffs on EU imports within months. The firm also warns that rising inflation from these tariffs could prevent the Federal Reserve from cutting interest rates in the next 12 to 18 months.

Paul Gruenwald, global chief economist at S&P Global Ratings, says protectionism is reshaping global trade, ushering in a phase of "new globalization." He cautions that tariffs could slow growth, deter investment, and increase inflationary pressure, possibly leading the Fed to raise interest rates later this year.

Gruenwald notes that as U.S.-China competition intensifies, companies are adapting their global trade strategies. He highlights artificial intelligence (AI) as a key battleground, with China ramping up development while Europe risks falling behind.

As trade tensions escalate, markets brace for volatility, and the world watches to see how these policies reshape the economic landscape.

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