Global economy braces for Trump's trade war and its consequences
Since early April, only two agreements have been signed: one with the United Kingdom and another with Vietnam. A deal was also reached with China to reduce the exorbitant tariffs the two countries had imposed on each other. Tariffs of "30% or 35%" could be imposed on imports from Japan, compared with the 24% rate announced in April, after Trump criticized Tokyo at the end of June for refusing to commit to buying American rice. The European commissioner for trade, Maros Sefcovic, is expected in Washington this week to try to secure an agreement that would reduce US customs barriers in key sectors such as automobiles and steel.
After the initial shock of the US president's tariff announcements, it was his many about-faces on trade policy that unsettled investors. This climate of uncertainty prompted companies to defer investments, risking an economic slowdown. Reflecting this loss of confidence, the dollar posted its worst performance in 50 years in the first half of the year. The dollar index, which measures the US currency against a basket of other major currencies, fell 10.8% over the first six months of the year.
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