Global Trade Faces Uncertainty as Tariffs Loom Under Trump

Tariffs have loomed over global trade faces uncertainty since November, and with President-elect Donald Trump’s inauguration just a month away, the timing and scale of his proposed levies are becoming a significant concern for businesses. The outcome of his policies will impact a $24 trillion global trade market.

Global Trade in a Holding Pattern

Bloomberg’s Trade Tracker, developed during Trump’s first term, revealed mixed results. Of ten key trade indicators, two are below normal, seven are in the normal range, and one is above normal. These results show no significant change from the previous month, signaling a continued uncertainty surrounding trade.

Business Adaptations to Tariffs

With the new administration on the horizon, businesses are taking proactive measures. FedEx Corp. data indicates companies are accelerating imports, and Chinese factories are exploring new production hubs. A survey by Oxford Economics found that nearly two-thirds of firms view a trade war as a “significant” risk to the global economy over the next two years.

Mike Johnson Reclaims House Speaker Role Amid GOP Tensions

Republican Mike Johnson secured reelection as House Speaker after overcoming opposition from conservative hardliners within his party…

Sector-Specific Impacts

Certain sectors have already felt the effects. LyondellBasell Industries NV, a major producer of chemicals and plastics, has seen order declines due to stockpiling and uncertainty. This highlights the unpredictable nature of global commerce under the threat of tariffs.

Market Experts Anticipate Early Tariffs

Ronald Temple, chief market strategist at Lazard, advised investors to prepare for early tariff announcements under the new administration. He also warned that the shift away from globalization and multilateralism may be more significant than anticipated.

Manufacturing Slows Amid Uncertainty

Global manufacturing, according to JPMorgan’s PMI index, is either growing slowly or contracting as the year draws to a close. Initial export data from South Korea shows minimal changes, indicating weak global demand in December.

Executives Brace for Tariffs

Executives have been frequently asked about tariffs during earnings calls, with many asserting their readiness. However, the uncertainty remains as businesses await clear policy signals.

Long-Term Adaptations to Protectionism

For nearly a decade, businesses have adapted to protectionism. To mitigate risks, companies have shifted production outside China, expanded into new markets, and absorbed tariff burdens. Lessons from the 2018-2019 trade war suggest companies will continue to adjust despite challenges.

Winners and Losers in a Tariff World

Tariffs are expected to create both winners and losers. For example, Malaysia’s Top Glove Corp Bhd saw a 120% surge in U.S. sales, benefiting from the shift away from Chinese suppliers. Countries like Vietnam and Mexico are also gaining market share as U.S. imports from China decline.

Tracking Trade Indicators in Real Time

We have identified key indicators, including shipping, sentiment, and export volumes, to monitor the impact of tariffs. The data, updated in real time, provides an up-to-date view of global trade metrics.

Tariffs imposed by President-elect Trump could disrupt global trade faces uncertainty, with significant surrounding their timing and impact on the $24 trillion market. Businesses must prepare for potential shifts in international relations, according to wsj deals.