How will Trump’s trade tariffs affect major economies?

As the deadline for crucial trade talks approaches on July 9, fears are growing that the resumption of retaliatory tariffs threatened by the United States will lead to a decline in global trade, which could negatively impact global economic growth.

According to an analysis by Bloomberg Economics based on trade policy positions as of July 1, the Chinese economy appears most vulnerable. It is estimated that more than 1.5% of the Asian country’s GDP is at risk, due to the potential loss of 70% of Chinese exports to the US market.

South Korea, for its part, stands out as one of the biggest losers if the US measures are implemented, given its significant exposure to the US market through auto exports. Policymakers in the country fear that this escalation could escalate into a broader trade crisis, disrupting supply chains and pressuring Korean factories.

The outcome of US talks with trading partners remains uncertain, leaving several scenarios open. Washington may review some provisions before the deadline to avoid repercussions for its Asian allies and mounting domestic pressure from business sectors.

Amid this scenario, investors and industrial companies are anticipating the next US decisions and the administration’s flexibility in dealing with its partners, and are looking for crucial signals regarding the future of international trade relations.

Country Percentage Impact on Country’s Exports to the United States Percentage of Country’s Economy at Risk

Source: Bloomberg Economics