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The world awaits President-elect Trump's stance on tariffs

2024-11-25 18:02:20, Kosova & Bota CNA

Countries around the world are bracing for economic fallout as incoming US President Donald Trump has warned of massive tariffs, particularly on China. As VOA's Seoul correspondent Bill Gallo reports, governments and businesses are finding it difficult to plan for possible responses due to the uncertain situation.

During his first term, Donald Trump imposed sweeping tariffs on China, rocking the global economy.

This time, Mr Trump is promising even more drastic measures – 10% tariffs on all imports and 60% on goods from China.

China has not commented directly on Mr Trump's warnings, but it has called for further trade tensions to be avoided.

"We do not answer hypothetical questions. But let me just reiterate that there are no winners in a trade war, and the world will not benefit from it either," said Chinese Foreign Ministry spokeswoman Mao Ning.

Tariffs are likely to hurt export-dependent economies in particular, but a widening US-China trade war could also create opportunities.

Many countries have taken advantage of companies moving out of China to avoid tariffs. Thailand's commerce minister recently told VOA that an influx of American companies have moved factories from China to his country.

"We must be able to overcome this situation. I actually see these problems as benefits for Thailand. I believe that we can be an investment destination for any country", he said.

However, this approach comes with risks. Many countries that have benefited from China's trade drift are now heavily reliant on exports to the United States, making them even more exposed to tariffs that Mr Trump could impose.

The concerns go beyond the US's biggest trading partners. In Africa, where trade with the US is limited, higher tariffs could make access for their businesses even more difficult, an analyst told VOA.

"If we talk about production, for example if we talk about pineapple production - shipping to the American market will be difficult. So I'm not optimistic about US trade with Africa when we talk about raising tariffs," says Melvin Foote, founder of a network devoted to development in Africa.

Much of the uncertainty stems from the fact that Mr. Trump acts unpredictably. During his first term, he often used the tariff warning as a negotiating tool before reaching individual trade deals, says analyst Jayant Menon.

"I don't believe that Trump is a protectionist. He is a merchant. That's how he likes to present himself, he's the author of 'The Art of the Deal' isn't he? That's why it likes to play a role in free trade agreements," says Jayat Menon of the Institute for Southeast Asian Studies.

Mr Menon says the targeted countries could push Mr Trump for new trade deals, rather than escalating tariffs that could hurt them and the global economy.

Not all of the president-elect's proposals signal protectionism. He has also suggested removing subsidies for US-made electric vehicles — subsidies approved by President Biden's administration.

"He called them wrong in an interview. So he will surely remove them. And this is positive in terms of their consequences for the global economy", says Mr. Menon.

Awaiting the return of an unpredictable president, the world weighs the risks and opportunities that can be created./ VOA