[US Election 2024]
"It will be unleashed mercilessly." Donald Trump, the winner of the November 5 U.S. presidential election, is expected to roll out a series of even stronger 'Trump 2.0' tariff measures immediately after his inauguration in January next year. Experts are warning that Trump's statements, in which he calls himself the 'Tariff Man' and boldly claims he would impose tariffs as high as 1000% if necessary, should not be dismissed merely as 'bluffing' or 'negotiation leverage.' Major countries, including the European Union (EU), are also accelerating preparations such as 'retaliation lists' in anticipation of the worst-case scenarios.
According to major foreign media outlets including Politico and The New York Times (NYT) on the 7th (local time), Trump is expected to exercise executive powers, including the International Emergency Economic Powers Act (IEEPA), immediately after his inauguration on January 20 next year to implement his tariff pledges. His promise to impose tariffs of up to 20% on all imports and a whopping 60% high tariff on Chinese products is expected to materialize over the first few weeks of his administration. These tariff pledges are assessed to be stronger and more extensive than those during his first term, which shook the world with a large-scale trade war.
Everett Eisenstadt, who served in Trump's first administration, said, "Trump is a person who does what he says," adding, "He has already transparently disclosed his tariff pledges and won the election. It is hard to say that the American people do not want this." Dmitry Grozuvinsky, a former World Trade Organization (WTO) official, also predicted that it would be "merciless." Notably, contrary to Trump camp officials, including Howard Lutnick, co-chair of the presidential transition team, who have argued that tariffs are merely negotiation leverage, experts emphasize that Trump's statements should be taken at face value regarding their seriousness. Edward Holden, a trade expert at the Council on Foreign Relations, said, "There is no doubt that he is sincere," adding, "Tariffs are at the very top of his pledge list."
Major countries, which have long prepared for the possibility of a 'Trump re-election,' are now accelerating their preparations in earnest. The EU is ready with a 'carrot' to import more U.S. liquefied natural gas. Additionally, it is considering lifting the 4.8 billion euro tariffs on U.S. imports imposed during Trump's first administration starting from March. However, the 'stick' has not been forgotten. EU diplomats said, "If Trump starts a trade war, we are preparing for 'significant retaliation.'" A former UK cabinet official, speaking anonymously, confirmed, "We have been working on what might happen if Trump resumes trade negotiations."
In Mexico, which has emerged as a tariff evasion base for U.S. tariffs originating from China, President Claudia Sheinbaum tried to reassure the public and business stakeholders the day before by saying, "There is no reason to worry." Major foreign media also pointed out that trade and tariff negotiations with Mexico could become more complicated in conjunction with Trump's tough border policies. China, the main target of the Trump-led trade war and the country facing the announced 60% high tariff, has not announced any specific countermeasures. However, given the inevitable export decline and economic slowdown, it is believed that China has taken considerable internal preparations. This is also the background behind Chinese President Xi Jinping's congratulatory remarks to Trump the day before, in which he mentioned, "If China and the U.S. fight, everyone will be hurt."
South Korea is also concerned that it could face trade pressure using its historically large trade surplus with the U.S. as a pretext and is deliberating countermeasures tailored to various scenarios. Adam Posen, president of the Peterson Institute for International Economics (PIIE), pointed out, "There is a high possibility of aggressive tariff decisions in the first few weeks after the second Trump administration takes office," adding, "Once tariffs are imposed, it is very difficult to remove them." The NYT warned, "Trump has considerable authority to unilaterally impose tariffs upon inauguration. The 'international emergency' defined by law can, in fact, be defined as almost anything," and cautioned, "Even U.S. manufacturers will be divided into winners and losers due to tariffs."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
