- In today’s CEO: Diane Brady on Trump’s new taxes for international trade.
- THE GREAT HISTORY: The tariffs were worse than expected.
- Markets: Global sale underway.
- Analyst notes from wedbush, Heyand swoop funds in, you guessed, tariffs, jobs and Tesla.
- Further: All news and water inlet chat from Fortune.
Good day. Friend or enemy? As soon as it mattered yesterday when Donald Trump announced radical objectives against all the commercial partners of the United States. The main numbers to know: a reference rate of 10% above all imports, with specific and higher tariffs in some countries, including 34% in China (in addition to existing rate of 20%), 20% in the EU and as high as 46% and 49% in Vietnam and Cambodia, respectively. “They do it, we do it,” the president said during the presentation of the Rosas Garden Rate. A little food to think when the consequences begins:
It is worse than expected. How was the White House Detail ironing From the plan deeply on Tuesday, the markets showed some signs of life as investors expected the last minute clemency. But the futures of shares were submerged after Wednesday’s announcement. Only about half of what Americans buy is done in the United States, according to Data from the Department of Commerceand industries such as the automotive sector that have complex global supply chains.
This undermines China+1 strategy of the manufacturers. Some Asian countries are especially difficult with 40% or more tariffsGiving a blow to the impulse of American manufacturers to diversify production beyond China to low -cost neighbors such as Vietnam, Bangladesh and Cambodia, especially in areas such as textile and electronics. Gap Inc. – Home to gap, AthleteBanana Republic and Old Navy: has reduced its exposure to China in recent years, but still Sources The vast majority of your clothes Of the Asian countries hit by the new rates. The change takes time.
A global reaction could damage all companies. Trump described yesterday’s rates as “Friendly” to the United States business partners. Of the anger of foreign leaders For foreign consumers who boycott products and trips, it is clear that our partners disagree. The hostility is bad for business, with Ey economists, Goldman Sachs and Moodys Predict lower growth of self -inflicted tariffs wounded. I spoke this week with Niccolo de Masi, CEO of Quantum Computing Company Ionq. “We are building all our things in the United States,” he said. “We are not negatively affected by tariffs, but we are realistic that our ability to succeed in Asia and Europe entails having more presence there.” That is more difficult to do if a commercial war causes nationalist instincts.
This could devastate affected economies and industries. Jacques Vandermeiren, CEO of the port of Antwerp-Bruges, the second largest port in Europe, Peter Vanham told my colleague At the beginning of this fall, “if Trump establishes tariffs of up to 10 percent, we will deal.” Substantially higher than that, Vandermeiren warned, it could mean a disaster for the steel of Europe, aluminum, car and other export -oriented industries. Switzerland’s surveillance industry, which Exports more of its products to the USNow it will face a strong rate of 31%. Those who yearn for a rolex or patek Philippe will settle for a substitute? I doubt.
There will be a lot of negotiation in the next few days and business leaders know from experience that what appears on the role in a press conference may not translate into action on the border, or it can quickly revert. And American consumers, whose expense explains more than two thirds of GDP, does not look so excited about all these rates that they are told to help them in the end. Consumer’s feeling tracked by the University of Michigan He has been lying this year to the lowest level from 2022.
Adam Smith once wrote that the nations rarely thrive begging their neighbors. That was in 1776, when mercantilism was dying and the United States was born. Liberated from the British domain, the young nation used tariffs to develop local industries that later competed on the world stage. With an ee.
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Contact the Daily CEO through Diane Brady at Diane.brady@fortune.com
This story was originally presented in Fortune.com
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