Fubotv earnings beat by $0.10, revenue topped estimates
Investing.com - President Donald Trump’s latest batch of tariffs could plunge both the U.S. and worldwide economies into a recession, analysts have warned.
Trump announced his broadest slate of tariffs to date on Wednesday, saying he would slap a baseline 10% duty on all foreign imports into the U.S. and impose greater levies on several longstanding trading partners in a bid to respond to perceived unfair trade practices.
China, the European Union, India, and Japan are among a number of countries set to face elevated so-called "discounted reciprocal" tariffs that aim to address foreign charges and other non-trade barriers. The White House considers these nations to be "bad actors" on trade.
The tariffs will take effect over the next week.
Strategists at UBS flagged in a note to clients that the U.S. imported $3.3 trillion of goods last year, adding that a 20% tax on that amount would be $660 billion -- or a weight of 2.2 percentage points on gross domestic product.
"[T]he magnitudes of the tariffs being considered is clearly material, and sufficient to put the economic expansion at risk should they be put in place for a prolonged period of time," the brokerage wrote. "The simple math is pretty daunting."
Trump and White House officials have argued that these moves are necessary to address trade imbalances, bolster government revenue, and reshore lost manufacturing jobs.
"[W]e’re going to start being very wealthy again," Trump said.
However, many economists have warned that the actions will drive up prices and dent growth, while businesses have complained that uncertainty around the tariffs has made planning out their operations difficult.
The full implementation of Trump’s trade policies represented a “substantial macro economic shock not currently incorporated in our forecasts,” analysts at J.P. Morgan said in a note.
“This shock will likely be magnified by its impact on sentiment and through the retaliation of countries facing significant increases in their tariff rates,” the analysts said.
"We thus emphasize that these policies, if sustained, would likely push the U.S. and global economy into recession this year."
China vowed to unveil its own response, saying there were no winners in a global trade war. The country’s commerce ministry called the tariffs "unilateral bullying."
European Commission President Ursula von der Leyen, meanwhile, pledged that a united bloc would respond to the levies, warning "if you take on one of us, you take on all of us."