New tariffs could spell major trouble for global economy: CEI analysis

President Trump has dubbed today “Liberation Day” by announcing a new round of tariffs on various goods entering the US. CEI senior economist Ryan Young says Trump’s “reciprocal” tariffs could spell major trouble for the economy.

“In announcing new tariffs against many of America’s trade partners, Trump redefined ‘reciprocal’ to mean ‘other forms of cheating,’ which is another way of saying he’ll do whatever he wants.

“For now, Trump will impose tariffs much higher than what most of the world charges. The global average tariff was under 5 percent in 2017, the year before Trump’s trade war began. Trump will charge Europe 20 percent, Japan 24 percent, India 26 percent, and China 34 percent.

“Now we see how the world responds. Israel has already announced it is dropping most of its few remaining tariffs against US goods. Will Trump honor his word and lower his tariffs against Israeli goods? Will other countries call Trump’s bluff? And how will Trump respond if they do?

“Financial markets will soon tell us what they think the answer will be. So will recession risk indicators like the Atlanta Fed’s GDP Now, various investment houses, and even betting markets. It won’t be good.”