Trump's tariffs: 3 summary posts
1 - Full summary of last week's events
2 - What happened with the Fed Friday's close, summary
3. Preparation for possible scenarios in the coming week
The new tariffs – a shock to the global economy. A minimum tariff of 10% on all imports to the US, with significantly higher rates on about 60 "most damaging" countries. Stricter tariffs on China (34%), Vietnam (46%), Taiwan (32%), India (26%), South Korea (25%) and more. The tariffs will take effect on April 9.
The implications – why is this so dangerous? 1. Direct impact on inflation – a price increase is almost guaranteed, and this will put the Fed in a difficult position. 2. Damage to the real economy – sectors like technology, automotive, and industry will be severely affected by the new costs. 3. Loss for the markets – Goldman Sachs and UBS are already warning that US GDP could suffer a 1.5%-2% decline in 2025.
We collected the main analyst reactions. Goldman Sachs: Trump's tariffs will harm GDP growth, increase inflation, and lead to negative pressure on the stock market. UBS Bank: If the tariffs remain, real GDP may fall by 1.5%-2% in 2025, and inflation could approach 5%. Bank of America: The effective tariff rate will rise to about 20%, far exceeding market expectations. Rating agency Fitch: The average tariff rate in the US will stand at 22%, compared to 2.5% in 2024.
The chances of a recession are rising - JP Morgan currently forecasts a recession in the United States in 2025!
In addition, the probability of a recession in the US in 2025 rose to 60% (+15.1) in Kalshi's prediction market, the highest level in months.
Impact on key industries. Chips: Bernstein warns of a possible indirect impact on demand, as imports of computers and smartphones could face tariffs of about $120 billion.
Apple: Citi estimates that the company could suffer a 9% drop in gross margin if it cannot pass on the costs to consumers.
In the next post: what happened with the Fed on Friday and why it is important to follow the rest of the story?