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Trump’s tariff policy could trigger the biggest trade crisis of the century
The U.S. prepares sweeping duties that threaten $33 trillion in global trade and rising inflation.
U.S. President Donald Trump is expected to announce the most extensive trade restrictions in a century. The formal announcement is anticipated in the coming days at a White House event, though specific tariff details remain undisclosed. According to Bloomberg, global trade flows worth approximately $33 trillion are at risk, with exports to the U.S. from some countries potentially dropping by 4% to 90%.
Bloomberg Economics reports that the Global Trade Uncertainty Index has reached its highest level since tracking began in 2009. Nomura chief economist Rob Subbaraman warned that the world is “blindly heading” into a new tariff war, with unclear criteria and potentially broader product coverage than just retaliatory tariffs.
Goldman Sachs analysts forecast that the average U.S. tariff rate could rise by 15 percentage points this year. This may trigger inflation, slow GDP growth, and raise the risk of recession. Under the worst-case scenario, tariffs could jump by 28 points, cutting U.S. GDP by 4% and increasing consumer prices by nearly 2.5% over the next two to three years.
Shang-Jin Wei, professor at Columbia Business School, likened the current outlook to the 1970s energy shock, warning that trade restrictions could act as a new catalyst for stagflation — a combination of economic slowdown and inflation.
Countries reportedly under review for new tariffs include the European Union, Mexico, Canada, Japan, South Korea, Vietnam, and India. Imports from China are already subject to an additional 20% duty.
Trump’s tariff strategy raises global risks and could result in one of the largest economic shocks of the 21st century.
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