Trump’s return to the White House with an ultra-protectionist program is shaking the world economy. Between customs taxes, trade tensions and galloping inflation, the entire economic balance is upended. Discover the threats looming over growth and international trade…
The return of Donald Trump to the White House and his resolutely protectionist program are shaking the world economy. After several years already shaken by multiple crises, experts fear a new period of instability marked by sluggish international trade, galloping inflation and slow growth. Deciphering an economic situation under high tension.
Towards a suffocation of international trade?
Trump’s first term between 2017 and 2021 had already been marked by an escalation of punitive customs duties. According to his campaign promises, Chinese products could this time be taxed up to 60% on import, and 10% for the rest of the world. According to a study by Roland Berger, if China and the European Union respond in turn, the cost could reach 749 billion dollars for the United States, 827 billion for China and 533 billion for the EU. by 2029.
But beyond the issue of customs tariffs, it is the very principle of international cooperation that seems threatened. As Tara Varma of the Brookings Institution points out, “the world of multilateralism of the 90s-2000s will no longer exist”. She anticipates “immense violence” from the initiatives of the 47th American president, calling into question the very foundations of world trade.
Inflation, the other threat
Alongside trade tensions, Donald Trump’s policies risk triggering a new inflationary shock. The Peterson Institute, for example, forecasts additional inflation of between 2 and 4% for China. The migration issue could also worsen the situation, as Gilles Moec, chief economist at Axa, explains:
“The question of immigration is as important as that of international trade on inflation”
– Gilles Moec, chief economist at Axa
With Donald Trump’s stated desire to massively deport undocumented immigrants, there are potentially 8.3 million workers who could be missing according to the Pew Research Center. The Peterson Institute estimates that this would cause inflation to rise by more than 2% in the United States, 0.6% in China and 0.2% in Europe.
Above all, this would slow down the current reduction in interest rates by central banks, which is nevertheless favorable to household consumption and business investment.
Asia and the United States, stalled engines of growth
Today, the dynamic of global growth is mainly based on two pillars: Asia, which contributes 60% of this growth, and the United States which is an exception among advanced countries with an expected GDP of more than by 2%. Two locomotives which risk seeing their progress seriously slowed down by Trumpian policy.
The International Monetary Fund is warning of the repercussions for the Asian continent of a worsening of the trade war initiated by the United States. As for the American economy, even with an optimistic scenario, Donald Trump’s program could cost it 2% growth per year between 2027 and 2031 according to estimates from the Peterson Institute.
Shared business environments
Paradoxically, tech players seem to take a positive view of the election of Donald Trump. The hypothesis of stricter regulation carried by the Democrats is receding, and paves the way for a new wave of deregulation favorable to the digital giants. This proximity is confirmed with figures like Elon Musk, new owner of Twitter and claimed supporter of Trump.
Another sector that could do well: that of cryptocurrencies. On Wednesday, the sole hope of regulatory relaxation was enough to propel bitcoin to a new all-time high. An enthusiasm that contrasts with the concerns of traditional economic circles.
As clouds gather over the global economy, Donald Trump seems poised to fundamentally shake up the established balances. Between uninhibited protectionism and distrust of international institutions, it outlines an increasingly uncertain economic future, where withdrawal competes with technological disruption. An explosive cocktail with repercussions that are difficult to anticipate, but which does not bode well for stability and prosperity on a planetary scale.
