FLASH
Shkruar nga Pamfleti
The tariff trade war began today, but the US is suffering an economic downturn even before the effects of Trump's decision are felt.
President Donald Trump's 25% tariffs on Mexico and Canada went into effect today, an extraordinary move aimed at bringing America's major trading partners into line.
But according to experts, it also risks weakening the North American economy, at a time of considerable stress. But according to international media, the US is sinking into recession even before the effects of the tariffs have fully taken hold.
According to Sky News, North America has been, in effect, a free trade zone for decades. Goods move across borders so frequently that the number of crossings is almost incalculable.
Consider an example recently published by the Wall Street Journal. It noted that a car piston can cross the border between Canada and the US and Mexico six times (round trip) before reaching the customer.
If it suddenly costs 25% more to bring a piston from Canada to the US, then imagine extrapolating that to every single component that makes that trip every day: that means the price of many goods goes up.
How much? It's hard to say, but consider that between them, Canada, Mexico, and China account for about 40% of all imports into the US.
They account for almost 60% of energy imports. So while the goal of these tariffs may be (we don’t have a clear picture yet as different administration figures give different explanations) to rebuild American manufacturing, it takes years to build factories. In the interim, the tariffs will mean higher costs for American consumers.
And the result of these higher costs is lower economic activity.
Not long ago, most high-frequency economic measures suggested that the U.S. economy remained stable.
But in recent weeks, high-frequency measures of activity have suggested that the U.S. economy is facing a very sharp slowdown. Indeed, the Atlanta Fed’s “GDPNow” Nowcast recently noted that the U.S. economy shrank at an annualized rate of 2.8% in the first quarter of the year.
According to Sky News, in other words, America could now be in recession. Perhaps not the start that Donald Trump would have hoped for. But, having caused so much disruption and uncertainty among producers and consumers through his tariff policy, it certainly can't be too surprising. /Pamphlet
Lini një Përgjigje