CNN: Donald Trump’s proposed economic policies for his potential second term in the White House could have profound effects on global trade and the US economy, with plans to impose significant tariffs and influence the Federal Reserve’s decisions.

Key Details:

  • Steep Tariff Hikes: Trump has proposed tariffs ranging from 10-20% on all goods imported to the US, a sharp increase from the current average of 2% for industrial goods. For Chinese imports, he suggests a staggering 60% tariff.
  • Historical Echoes: These tariff levels echo the protectionist Smoot-Hawley Tariff Act of 1930, which contributed to the deepening of the Great Depression by plummeting global trade and provoking international retaliation.
  • Economic Consequences: Economists widely agree that Trump’s tariff strategy could hinder global economic growth, trigger inflation in the US and globally, and lead to trade wars that damage global economic welfare.
  • Impact on Global Markets: Analysts predict that such tariffs could reduce global economic growth by approximately one percentage point in 2026 and lower company profits by an average of 6%, significantly impacting global stock indexes.
  • Potential for Retaliation: Similar to past reactions, countries affected by these tariffs might impose retaliatory tariffs on US goods, further straining international trade relations.
  • Interference with the Federal Reserve: Trump has also expressed a desire to have more influence over the Federal Reserve’s decision-making, potentially compromising its independence and unsettling global financial markets.

Donald Trump’s proposed economic policies could lead to a significant retraction in global trade relations, reminiscent of the protectionist measures of the 1930s. The sweeping tariffs and potential meddling with the Federal Reserve’s independence could destabilize the global economy and reverse the benefits of open trade accrued over decades. As the US heads towards the election, the global community watches closely, wary of the potential economic repercussions of these radical policy changes.