…there is nothing to add to this WSJ Article, dear LinkedIn inmates.
Let the fun begin. It’s a fantastic example of a completely misguided economic policy, which leads to further damage to companies, supply chains, and consumers.
There will be no winner at all. Not even if this decision is withdrawn in a few days. What will remain is uncertainty, loss of trust, and further division between friends weakening Western democracies even further. It will only benefit a special clientele. Russia, China, and other adversaries of the USA, Canada, and alliances such as NATO, the EU, etc. will take a close look at it and drive further friction between the states formerly known as friends and allies.
đź’ˇBIG QUESTION: What are the next steps, has anyone seen instructions, guidelines, or directions on how to execute and how will the governments avoid operational chaos to avoid harming those involved even more?
What’s the impact:
👉 Inflation Risks: Tariffs will raise inflation, slow economic growth, and consumers and lead to potential job losses in affected industries
👉 Supply Risks: History shows that tariffs will lead to delays and disruptions on multiple layers. Longer lead times, inventory stockpiling adjustments, incl. Bullwhip-Effect
👉 Retaliatory Measures: Canada and Mexico already announced to respond with retaliatory tariffs, which could escalate into a broader trade conflict
👉 Financial Markets: We already see increased volatility. The Mexican Peso and Canadian Dollar weakened, and Treasury bond yields rose, investors raised concerns over potential economic instability
👉 Global Trade Dynamics: Significant shift toward protectionism and the formation of hostile trading blocs disrupting global supply chains
👉 Economic Growth Concerns: The Tax Foundation estimates a potential 0.4% reduction in long-term economic output if the tariffs remain in place
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