Nearly 100 days in, Donald Trump’s second term as US president has been defined by his determination to upend the established order on nearly all fronts of domestic and foreign policy. In the fifth part of this series, we look at the chaotic landscape in global trade after Trump’s shock increase – and temporary reduction – of tariffs for almost every US trading partner.
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Those with a vested interest in global trade – that is to say, almost everyone – are likely treating themselves for whiplash after attempting to follow the wild swings of US President Donald Trump and his administration over the past month.
Following multiple rounds of tariff increases for Chinese goods after beginning his second term in January – an action most expected based on Trump’s first term and his hawkish campaign rhetoric – the president upped the ante on April 2, rolling out an unprecedented package of tariff increases for US rivals as well as allies.
Barely a week later, with global markets in disarray and business leaders crying out for a reprieve, Trump seemed to reverse his position. He announced a 90-day pause on much of the new levies for most countries – except for China, of course – and called for bilateral negotiations to reduce the US trade deficit in exchange for tariff relief.
Continued back-and-forth tariff hikes between Washington and Beijing, along with a lack of progress in these country-to-country trade talks, have not mollified investors or restored confidence in the US’ ability to manage the global economy.
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How things play out in the final days of April – whether there will be detente or deterioration in trade between the world’s two largest economies – is likely to inform how Trump frames the first 100 days since his return to power, and offer some clues about what the rest of his term may bring.
“There is a Chinese idiom: ‘from great mayhem comes new order’. But, having wreaked so much havoc three months into his second term, it remains to be seen if Trump can establish anything new and get things in order,” said economist Li Xunlei.