From CNBC:

Former U.S. President and Republican presidential candidate Donald Trump holds a rally in advance of the New Hampshire presidential primary election in Rochester, New Hampshire, U.S., January 21, 2024. The former president, a front-runner for the Republican nomination, plans to impose a 10% tariff on all imported goods, aiming to triple the government’s intake and encourage American domestic production.

Critics have raised bipartisan concerns about the policy, noting that such a tariff would effectively raise taxes on U.S. consumers by more than $300 billion a year, and trigger retaliatory tax increases on U.S. exports. Treasury Secretary Janet Yellen said the plan would “raise the cost of a wide variety of goods that American businesses and consumers rely on,” though she noted that tariffs are appropriate “in some cases.”

Policy analysts have estimated that the 10% tariff would result in a 0.31% ($62 billion) decrease to U.S. GDP, making customers worse off and decreasing U.S. welfare by $123.3 billion. Investors are concerned about the potential impact on all asset classes, including equities, FX, and bonds, noting that the policy would have broad negative consequences for the U.S. economy.

During his first term in office, Trump triggered a trade war with China by unilaterally imposing $250 billion worth of tariffs on goods imported from China, which critics estimate have cost Americans an extra $195 billion since 2018. President Joe Biden’s administration has largely kept these tariffs in place, noting the uncertain impact of Trump’s erratic approach to policy decisions.

Trump has also claimed that he would stop Ukraine’s war with Russia within 24 hours, but has been ambiguous about the details of his supposed peace plan, leading to heightened geopolitical risks. His unpredictable approach to global issues adds anxiety to a world already marked by uncertainty.



Read more: Trump’s proposed 10% tariff plan would shake up every asset class: Strategist