"Trump's 10% Universal Tariff Will Shake All US Assets"

"Not Just Simple Tariffs... Destroying Global Systems"
US Tax Increase of 400 Trillion Won... GDP Down 0.31%

Concerns are emerging over former U.S. President Donald Trump's pledge to impose an additional 10% universal tariff on all imports, CNBC, an American economic media outlet, reported on the 22nd (local time).

Michael Every, a global strategist at Rabobank, appeared on CNBC that day and warned, "The market needs to start considering the structural impact of former President Trump's pledge to impose a 10% tariff, which could shake all assets including stocks, foreign exchange (FX), and bonds."

Former U.S. President Donald Trump is campaigning in Laconia, New Hampshire, on the 22nd (local time). [Image source=Yonhap News]

Former President Trump announced a pledge to impose an additional 10% tariff on all imports, including goods from allied countries, to block China's circumvention exports and encourage domestic production in the U.S. He currently holds an overwhelming lead in support among Republican presidential primary candidates.

Strategist Every said, "Unlike in 2016, the market will not be caught off guard by former President Trump," citing the 10% tariff as one of the top concerns for investors.

He added, "Former President Trump is not merely mentioning raising tariffs by 10%," and said, "He is talking about structurally dismantling the global system by any means necessary to reindustrialize America." He continued, "He aims to build a fence between the U.S. and the rest of the world so that production within the U.S. is cheap, while production outside the U.S. and imports become expensive."

Earlier this month, U.S. Treasury Secretary Janet Yellen expressed a negative stance on former President Trump's tariff pledge, stating, "In some cases, tariffs are appropriate," but also warning that "they will raise prices on a variety of goods that American businesses and consumers rely on."

Yellen is not alone. Concerns about tariff policies are emerging across party lines. The U.S. think tank Tax Foundation stated that former President Trump's tariff pledge would effectively increase taxes on American consumers by over $300 billion annually (approximately 400 trillion won) and trigger retaliatory tariffs on U.S. exports.

The American Action Forum, a center-right U.S. think tank, estimated that if trade partners impose retaliatory tariffs, the U.S. gross domestic product (GDP) would decrease by 0.31% ($62 billion, approximately 83 trillion won), worsening consumer living standards and reducing welfare by $123.3 billion (approximately 164 trillion won).

Tom Lee, a data and policy analyst, analyzed in the American Action Forum's November report that assuming a scenario where trade partners are likely to impose retaliatory tariffs, "it would distort global trade, disrupt economic activity, and cause widespread negative consequences for the U.S. economy."