Trade Warrior: How new US duties will affect the global economy

The volume of imports to the United States from countries for which Donald Trump is imposing duties may decrease by at least 10-15% this year, experts interviewed by Izvestia estimated. On April 2, the American leader announced large-scale measures: base tariffs of 10% are introduced for all products supplied to the United States. For the EU, this figure has been raised to 20%, and for China — to 34% altogether. In his speech, the president called April 2 the day when Americans will become rich again. Meanwhile, the leaders of other major economies — in Europe and Asia — said even before Trump's speech that they were ready to respond to the US measures. This could mean a global trade war. All this will reduce global GDP and increase inflation around the world, experts believe. But Russia will be affected indirectly, as our trade turnover with America is extremely small. Against this background, the most reliable investment is in gold, which has already jumped by 18% since the beginning of the year, experts add.

What new duties is Trump introducing on April 2

On April 2, at 23:00 Moscow time in the Rose Garden of the White House, US President Donald Trump revealed a new package of trade duties that will affect all countries, even American allies. He has already announced more than once that this day could be called America's "Liberation Day."

"Dear Americans, <...> April 2, 2025, will forever be remembered as the day of the revival of American industry, the day when America's destiny was returned, and the day when we started making Americans rich again," he said at the event.

During his speech, he showed a table with new duties. One of the most important changes is that the United States is imposing a 10% common import tariff on goods from all countries, Trump said. In addition, there are fees of 20% for products from the European Union, 10% from the UK, and 34% from China.

At the same time, Trump did not focus on Russia separately in his speech at the time of sending the issue to the press. However, before that, at the end of March, the American president announced that if the conclusion of a peace treaty with Moscow on a cease-fire on the territory of Ukraine did not take place due to Moscow's fault, repeated tariffs of 25% on oil and other products would be imposed on the Russian Federation within one month.

The higher duties are aimed at those countries that supply more products to the US market than they import from there, experts interviewed by Izvestia noted. The greatest pressure is exerted on China as the main competitor of the United States in the global market.

— This is due to the fact that negotiations between the United States and China are quite difficult. The concessions that the American administration would like to receive from the Chinese comrades still look unacceptable to the latter," said Andrei Barkhota, an independent expert.

How leaders around the world react to statements about duties

Even before Trump's speech, when the details of the new duties were not provided, the Russian side did not ignore the announcement of new measures.

— We continue our contacts with the American side. The topic is very complicated. The substance that we are discussing, related to Ukrainian regulation, is very complex," said Dmitry Peskov, the Russian leader's press secretary.

There was a reaction from other world leaders in advance. EU President Ursula von der Leyen said that Europe does not want to take retaliatory measures against the United States, but if the American leader follows through on his threats and imposes trade duties, the European Union will use retaliatory measures.

The Canadian economy may also suffer from the fees, but back in March, Ottawa mirrored the introduction of 25% tariffs on steel and aluminum. Subsequently, the country's new prime minister, Mark Carney, was determined to take tough measures, but he assessed recent telephone conversations with Trump as very positive. It is possible that the US-Canadian conflict may be resolved in the near future.

The reaction in Asia to Trump's announcements can be described as mixed. Some countries, such as Japan, are considering the possibility of introducing "appropriate measures," said Prime Minister Shigeru Ishiba. In South Korea, they are less determined. The country's authorities understand that the imposition of duties can have a very negative impact on the economy, especially on the automotive industry.

China has already imposed additional tariffs of 10-15% on agricultural products from the United States. Beijing has also applied to the WTO.

Australia plans to diversify its trade relations and strengthen ties with the countries of the Indo-Pacific region in response to the tariffs and duties imposed by the United States, said Prime Minister Anthony Albanese.

Global markets' reaction to Trump's new tariffs

The announcements of new US duties have had a strong impact on global indices. Over the past month, the US S&P 500 has declined by 6% to 5,633 points, according to data from the Trading View platform. The European Stoxx 50, which reflects the value of blue chips in the region, fell by 8% to 5,631 points in March. At the same time, the Chinese Shanghai Composite remained virtually unchanged and hovered around the 3,350 point mark.

Against the background of trade wars, investors stop believing directly in the US economy. In particular, in the last three months there has been a net outflow of money from treasuries (US government debt bonds) — that is, investors are selling them more than they are buying, and this is an unusual trend.

At the same time, the beneficiary was gold, which is traditionally considered a protective asset. In the first quarter of 2025, the price of precious metals increased by 18% to $3,160 per troy ounce, which became a new record.

— Now gold is the most interesting asset, which is growing in price, and therefore has attracted money from both global central banks and investors in recent months against the background of stagnation in other asset classes. In this regard, gold quotes are now very overheated, not only in the short term, but also in the medium term," believes Finam analyst Alexander Potavin.

However, now gold prices are already close to the ceiling of this growth cycle, the expert believes. According to his forecasts, this year the precious metal may retain its value at the level of $ 3,200-3,300 per ounce.

How will a new round of trade wars affect the United States itself

A new round of trade wars provoked by Trump's protectionist policy will cause a slowdown in global GDP growth for five to seven years, independent expert Andrei Barkhota believes. At the same time, the polarization of countries and regions will increase and new axes of interaction between states will arise. Inflation around the world may accelerate, he added.

When imposing the duties, Trump stated that they should support the US economy, as they would protect local producers, as well as motivate companies from abroad to transfer production to the States in order to avoid import tariffs.

— We are bringing prosperity back to America. This is a very big deal. It will take some time," the American president said.

However, experts interviewed by Izvestia believe that duties, at least in the early years, will only harm the US economy. It may amount to 0.2% to 1.3% of GDP, and additional inflation is about 0.5-1%, says Olga Belenkaya, head of the Macroeconomic Analysis Department at Finam.

Trump's main task is to make America great again, but for this he needs at least the markets of Southeast Asia, explained Pavel Seleznev, dean of the Faculty of International Economic Relations at the Financial University under the Government of the Russian Federation. The President of the United States understands that in order to produce goods, it is necessary to reduce taxes within the country, to make the real sector attractive again, so that the industry can begin to develop. To achieve this goal, it is necessary to impose trade duties and tariffs on all other players in global trade, even its neighbors in Canada, the expert added.

Foreign experts also express a negative view of the prospects for the US economy. Goldman Sachs, one of the largest investment banks in the world, has raised its estimate of the probability of a recession in the US economy in the next twelve months to about 35% from 20%. And in early March, J.P. Morgan Chase's chief economist estimated the probability of a recession this year in the American economy at about 40%, although at the beginning of the year his estimate was only 30%.

What the new duties mean for other countries

The tariffs presented on the main trading partners of the United States — China (34%) and the European Union (20%) — turned out to be comparable and even more in relation to what the Western media expected. In this case, the decrease in imports in real terms may amount to 10-15% per year, predicts Yuri Ichkitidze, analyst at Freedom Finance Global.

Inflation will accelerate in all countries against which duties are imposed, but in the EU it will also be more pronounced due to the growth of defense spending, Andrei Barkhota believes.

According to experts, the direct impact of the increase in US import tariffs on Russia is minimal, since after 2022 we have an extremely small volume of bilateral trade with America. Perhaps the indirect impact may be related to the deterioration of conditions in the global economy and the weaker growth of the Chinese economy.

"In this case, we can expect a reduction in global demand for raw materials such as metals, oil, and petroleum products, which may negatively affect Russian exports," says Olga Belenkaya from Finam.

According to Pavel Seleznev from the University of Finance, Russia needs to take a passive position. Since the introduction of sanctions, our country has already proved that it can exist very successfully in such conditions — this is reflected in the rapid economic growth in the country in recent years, he concluded.