A Tariffs Cheat Sheet – The New York Times

It was much worse than expected. The attempt by President Trump to reverse the rules of global trade through large tariffs against dozens of nations, including the main partners such as the European Union, Japan and China, has caused a collapse in the global markets and sent Company board rooms climb.

Today, the rates of 10 % enter into force on all American commercial partners except Canada and Mexico. Further, the “mutual” rates will enter into force on dozens of other nations on Wednesday. China has to face the most difficult withdrawals – At least 54 percent – and reacted with his Just the toll on US goods Yesterday. Expect an answer from the EU next week.

Trump discussed That the economic pain caused by the rates will be short -term and in the end justified by a boom in the American economy, but the news of the measures affect investors hard. The S&P 500 benchmark closed nearby yesterday Territory of the bear marketWith analysts who warn an increased risk of recession.

Jerome Powell, the chief of the Federal Reserve of the United States, offered a little Glum Outlook Yesterday on the growth prospects and warned the highest prices he recognized could be more than temporary.

There is a lot to do. Dealbook asked economists, investment researchers and other experts to help give meaning to what will be the next.

How did the new rates change the risk of a recession?

We asked: Jason Furman, professor of Economics in Harvard and former Economic Councilor of President Barack Obama.

“The” known “of all the rates that President Trump has announced so far will subtract about a percentage point by the growth of GDP, lowering it from what would have been about 2 % this year to something more similar to 1 %. This is what you depend on a standard macroeconomic model based on commercial actions and how they would respond to the variations in prices.

“The problem is how big the” unknown unknown “are: consumer trust is falling, corporate uncertainty is the highest recorded, the prices of the activities are decreasing, which all go in one direction only for growth, which is falling on. If we have a recession, they will be these intangible perception factors that were the cause.”

Other views: In a note entitled “there will be Blood”, the chief economist of JpMorgan on Thursday increased the chances of a global recession to 60 percent from 40 percent. “It is likely that the effect of this increase in taxes is enlarged: through retaliation, a slide in the feeling of the United States affairs and in the interruptions of the supply chain,” he wrote.

Are the United States rates open opportunities for China?

We asked: Gabriel Wildau, specialist at political risk in China at the Teno consultancy company.

“Exports have been the saving grace of the Chinese economy in recent years, and now it will have to rely on internal demand to generate growth. But reduced access to the American economy will force US allies such as Japan and South Korea, which once were firmly aligned with Washington’s efforts to contain China, to rethink this alignment.

“President Trump believes that the rates will force global companies to invest in production based in the United States, but this incentive could be overwhelmed by a perception between global companies that investments in the United States now have a high degree of political risk. On the contrary, China’s leadership has engaged in a global offensive spell to attract multinational investors, as recently highlighted by the meeting of President XI President with a group of global executives.

“I have heard of foreign companies operating in China that the high government officials are more accessible than ever for meetings. In these meetings, these officials are highly stimulated, often by directly educating the parades to deal with the complaints that foreign companies raise. China has suffered from affluent of foreign direct investments, but the shock of Trump now creates an opportunity to reverse this drop.”

Other views: Trump has targeted not only China, who faces at least 54 % of ratesBut also many of the alternative routes, such as Vietnam and Cambodia, through which Chinese goods travel to US consumers as a way to avoid the rigid penalties applied to Beijing.

“If no nation can escape rates, I wonder if the global supply chains will gravitate to China, where the production economy is too attractive”, Han Shen Lin, director of the Chinese country for the Asian group, a consultancy company, he told the Times.

“There is also a small possibility that the rates guide China and the EU, the second largest consumer market, closer, closer, Jeanna Sgielek wrote for the TimesBut “there is an even greater possibility that this moment will tear the EU and China to pieces”.

How long do they take manufacturing companies to rotate their supply chains?

We asked: Erin McLaughlin, Senior economist at the Council of the Conference and former vice -president of private resources at the American Council of Engineering Companies.

“Manufacturers can use everywhere from several months to years to rotate their supply chains in reaction to rates. The factors include the complexity of the products manufactured, whether suppliers upstream and to host domestic production and the long process of environmental approvals, allowing, designing, building and equipping a factory.

“Modern production plants often include high-tech functionality such as robotics that guide the specialized-planning processes much more sophisticated than those of the 20th century. Companies generally make orders for these years of personalized capital equipment in advance.

“And, of course, the new production plants require money for the construction and people to operate. Therefore further challenges around the high cost of financing, market uncertainties including inflation and availability of qualified labor also weigh the decisions to tame the supply chains.”

Other views: Apple’s years work for Move the production of some products outside China It highlights the challenges that companies face in responding to changes in commercial policy. But some US industries they are anxious of rates, even as many economists and entrepreneurs claim to be skeptical about this The resuscitation of US production is even possible.

Rates are considered inflationary. Does it mean that Fed has finished cutting interest rates this year?

We asked: David Seif, the economist leader for the markets developed in Nomura.

“This year we have gone from zero cuts powered to one, so we actually increased our expected number of cuts. But everything we did was that we previously expected previously in 2026 within a few months. We think that the Fed will keep stopped until December 2025.

“In the end, we believe that the increase in inflation from these rates will be significant and we plan that the basic PCE will rise to over 4.5 % year on year in 2025. This inflation, we think, will be a higher priority for the growth of the Fed than the growth under trendy. The framework of our point of view-the Fed will give the priority to the struggle for the inflicted such, was coherent to when Trump was elected.

“We have moved the times of the cuts powered mainly because the rates seem affected all at once instead of being gradually.

Another view: Morgan Stanley sees No cut this year; After yesterday Report on bursting workThe Futures market was Pencil in four cut by the end of the year. In his first Public comments since Trump has announced the rates on FridayJerome Powell, the president of the Fed, said that the rates risked raising even higher inflation and slower growth than initially expected and that it was “too early to say what the appropriate path will be for monetary policy”.

Is this the end of globalization?

We asked: Ian Bremmer, the global strategist who founded Eurasia Group and Media Gzero.

“Globalization has been drifting for some time. The United States have been on the sidelines by pushing its industrial policy – that the world has seen both under Trump and biden. But until the day of liberation, the United States did not actively have to distinguish it. The world leaders and the companies have still based on economic cooperation. They purchased their products through the interconnected supply chains and sold their assets around the world.

“But it is sure to say that the era of globalization has officially ended. Just like the British after Brexit but on a global scale, we are overall a new era. Even if the countries manage to cut the agreements with the United States in the short term, in the long term they will try to risk themselves from American volatility and with the highest prices. The message in which the rates have been sent.”

Other views: Ryan Petersen, CEO and founder of Flexport, who makes the logistics software of the supply chain, told Dealbook that trade had survived events such as world war, black death, colonialism and de-colonialism and supported: “All these things were much more disruptive for the status quo of all that we live in this moment.” Do you think there will be more trade, no less, in 10 years.

Infantup-Spug in accident, general manager of the World Trade Organization, he said in a statement yesterday That Trump rates “could lead to a total contraction of about 1 % in the commercial volumes of global goods this year, representing a downward revision of almost four percentage points compared to previous projections”, and which was “deeply worried about this decline and the potential for escalation”.

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