emerging
Renewed US Protectionism
The second Trump administration is expected to implement higher tariffs on China and autos, impacting global trade and economic growth.
Timeframe
near-term
Subcategories
Impact areas
Detailed Analysis
The report anticipates a resurgence of protectionist trade policies under the second Trump administration. This includes new tariffs on Chinese goods, potentially reaching up to 60% and averaging a 20 percentage point increase, primarily targeting items previously listed in the 2018-2019 trade war. Additional tariffs are expected on autos from the EU and Chinese-made electric vehicles imported from Mexico. "We expect the second Trump administration to bring higher China and auto tariffs, much lower immigration, some fresh tax cuts, and regulatory easing." This renewed focus on protectionism is expected to have a ripple effect across the global economy, impacting growth and trade relationships.
Context Signals
Historical precedent of the 2018-2019 trade war
China's reduced trade exposure to the US compared to 2018
Potential retaliatory actions from affected countries
Edge
Non-China EMs like Mexico and Vietnam could benefit from trade shifting away from China.
Increased trade policy uncertainty could drive investment in supply chain diversification and regionalization.
The focus on electric vehicles in the tariff strategy suggests a potential attempt to bolster the US electric vehicle industry.
