Donald Trump's impending announcement on tariffs could signify a significant departure from decades of economic globalization, warranting global attention. He is expected to propose a 20% universal tariff on imports, which could drastically alter trade dynamics and elicit retaliatory measures from other countries. Analysts suggest that such tariffs could substantially impact the UK economy, potentially shrinking it by 1%, and result in a global economic toll of around $1.4 trillion due to trade diversion and price increases. Experts warn that trade wars, despite their perceived benefits, could lead to widespread economic losses across nations.
Every time Donald Trump has mentioned his plan to levy massive tariffs on imports into the US, there has been a widespread assumption that they will be delayed, watered down or rowed back.
President Trump has been adamant that the tariffs will be 'reciprocal' and the US will be 'nicer' to its trade partners.
A system such as this, with equivalent global retaliation, would see the UK economy shrinking by 1%, enough to wipe out growth and lead to pressure for tax rises or spending cuts.
Trade wars are hard to win, and easy for everyone to lose.
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