While the latest tariffs are targeted at Canada, Mexico and China, analysts said these actions could have far-reaching consequences for the rest of the world, given the nature of supply chains.
“It also is a powerful signal to the rest of the world that the US is prepared to do extraordinarily unusual things in order to, as Trump says, make America great again,” said Elms, head of trade policy at philanthropic organisation Hinrich Foundation.
“There are others in his sights. He’s already threatened the European Union with upcoming tariffs later on in February,” she added.
“So I think this is only the beginning of what Trump intends to be a much broader assault on what he sees as unfair trade practices by the rest of the world towards the US.”
Meanwhile, Asian economies that benefited under Trump’s first presidency between 2017 and 2021, as a result of the US slapping tariffs on hundreds of billions of dollars worth of Chinese goods then, may face a tougher time under his second term in office, said observers.
“I think it is a mistake to think that Trump 2.0 is going to be as benign for Asia. I suspect that after (the US) starts imposing these tariffs against Canada, Mexico, China, and moves on to the EU, it will become much harder for firms across Asia to use inputs from China, and potentially Canada and Mexico to export to the US,” said Elms.
“While Asia’s currently feeling pretty relaxed about many of these actions, the consequences are going to be pretty severe as well for any firms that are trying to trade with the US.”
