The world economy was already struggling with a confusing range of variables, from geopolitical conflicts and a delay in China to the evolving complexity of climate change. Subsequently, President Trump is a plan to upgrade for decades of trade policy.
When starting a process to impose so -called mutual rates on US trading partners, Mr Trump increased the volatility for international companies. He broadened the scope of his unfolding trade war.
In the basic concept, the argument for mutual rates is simple: with which American companies are supplied when exporting their wares to another country, must apply to import from that same country. Mr. Trump has long defended this principle and presents it as a simple issue of honesty – restoring the fact that many US trading partners retain higher rates.
But in practice, calculating individual rate rates on thousands of products that have been drawn from more than 150 countries is a monumental implementation problem for a wide range of companies, on American manufacturers who depend on imported parts to retailers who buy their goods from abroad.
“It is potentially a Herculean task,” said Ted Murphy, an international trade expert at Sidley Austin, a law firm in Washington. “You can have 150 different rates for every widget, every tariff classification. You have Albania to Zimbabwe. “
The order that Mr Trump signed on Thursday gave his agencies to study how to continue with mutual rates. This increased the risk of increasing the costs for American consumers in a time of deepening concern about inflation, which challenges the president's own vows to lower prices for groceries and other daily articles. And that increased the possibility of a greater delay in the Federal Reserve when lowering the loan costs.
It also speeds up the decrease in the world trade system, which has long been aimed at multilateral blocks and rated by the World Trade Organization. Mr. Trump strives to promote a new era in which treaties make way for negotiations from country to land in the midst of a spirit of nationalist brio.
The transition is in danger of adding tribes on global supply chains after years of unrest. International companies have argued with a unfolding trade war between the world's two largest economies, the United States and China. They have confronted with obstacles to continuing through the Suez and Panama Canals, which increases shipping prices.
Now Mr. Trump presented them another formidable puzzle.
Under the system that have been the BelW for three decades, the Member States of the World Trade Organization have set the rates for each type well, so that all members expand the same basic rate. They have also negotiated treaties – with other countries and through regional trade blocks – that have further illuminated the rates.
Mr. Trump has long described the United States as a victim of this structure, referring to trade shortages with China, Mexico and Germany. When announcing the arrival of mutual rates on Thursday, he recovered that he claims that the authority to negotiate the conditions for his benefit again, absent respect for existing trade agreements.
It seemed no coincidence that Mr Trump made his announcement on the day that the Indian Prime Minister, Narendra Modi, visited the White House. The United States has a considerable trade deficit with India, with the value of the imported goods that his exports out last year with $ 45 billion.
This import includes plastics and chemical products that make rates of less than 6 percent when they are sent to the United States, according to data collected by the World Bank. When comparable categories of American goods are exported to India, they confront rates ranging from 10 to 30 percent.
If the Trump government would elevate US taxes to equal levels, that would force American factories to pay more for chemicals and plastics.
The same pattern applies over a wide range of consumer and industrial products – shoes from Vietnam, machines and agriculture from Brazil, textiles and rubber from Indonesia.
A leading trade association of the electronics industry, IPC, warned Thursday that increased trade protection would harm the US economy.
“New rates will increase production costs, disrupt the supply chains and stimulate production offshore, further weaken the American industrial basic base,” said the president of the association, John W. Mitchell, in a statement.
In Mr Trump's approach, some experts see a potential negotiating tactics aimed at force trading partners to lower their own rates, rather than a prelude to the United States that cancel its. If that is true, the process of calculating new rates can actually lower prices.
“There are many ways in which this can go very badly for us,” said Christine McDaniel, a former treasury officer under President George W. Bush and now a senior researcher at the Mercatus Center on George Mason University in Virginia. “But if he can get other countries to open their markets, there is a limited path where this could ultimately promote trade,” she said.
Still others warn that each negotiation process can be less led by national objectives than the interests of Mr Trump's allies. Tesla, the electric vehicle company run by the loyalist Elon Musk of the administration, could benefit from exemptions to increased rates for important components.
The tumult has companies that are active in the United States, must guess how events will happen if it weighs the costs of importing parts or end products. Things, such as the cliché goes, craves nothing more than certainty. That raw material is becoming scarce.
Since the first term of Mr Trump, when he placed rates for Chinese import – a policy that President Joseph R. Biden Jr. has expanded – companies that sell on the American market have shifted production from China.
Rising prices to move cargo per container ship have encouraged companies to close the distance between their factories and their American customers, a trend known as Nearshoring.
Walmart, a retail empire ruled by the pursuit of low prices, has moved orders from Chinese factories to India and Mexico. Columbia Sportswear has scouted factory sites in Central America. MedSource Labs, a manufacturer of medical devices, has moved orders from factories in China to a new factory in Colombia.
Mr. Trump has challenged the merits of such strategies by threatening 25 percent rates about the entry from Mexico, Canada and Colombia, before they postpone or put such plans aside. He has imposed levies on the whole of the board on steel and aluminum. He has delivered 10 percent rates for Chinese import. Where he can turn the next one is the subject of a potentially expensive salon play that takes place in business council spaces.
Some suspect that the uncertainty that comes from these movements is exactly the point. Mr. Trump has long claimed that his ultimate goal is to force companies to set up factories in the United States – the only reliable way to avoid American rates. The more countries he threatens, the greater the risks for every company investing somewhere else in a factory.
The problem is that even companies with factories in the United States depend on parts and raw materials from all over the world. More than a fourth of American import represents parts, components and raw materials. Making these goods more expensive, damage to the competitiveness of domestic companies, which endanger American jobs.
Last week Ford Motor warned that rates on Mexico and Canada would destroy the supply chains.
“A rate of 25 percent in the Mexico and the Canadian border will blow a hole in the American industry that we have never seen before,” said the President of the Company, Jim Farley.
For now, the business world is struggling again to be divine which of the statements of Mr. Trump is just a gamble and pass on those real changes.
On spreadsheets that are maintained by multinational companies, the appropriate tariff rates for each country on earth suddenly seem to be subject to rerechanism.
Or not.
“We take Trump seriously, but not necessarily literally,” said Mr. Murphy, the trade lawyer. “He talks in broad strokes, but we have to see what actually comes forward.”
