Trump’s “Tailor-Made” Trade Deals: A New Era of bilateralism?

President Trump has declared a shift towards what he terms “tailor-made” trade agreements, contrasting them with “ready-to-wear” deals. Speaking from the White House, he indicated that agreements with Japan and South Korea are nearing completion, hinting at further bilateral negotiations. This approach signals a departure from multilateral trade frameworks,perhaps reshaping global commerce.

Everything is going vrey well for us, we do what I call tailor-made agreements, not ready-to-wear, but haute couture. – President Donald Trump

US-China Trade War Intensifies: Tariffs and Retaliation

The trade conflict between the United States and China is escalating. The US is set to significantly increase tariffs on Chinese imports, with a potential 104% surge on Wednesday. This follows President trump’s proclamation last week, threatening further tariffs if china retaliates.Beijing has vowed to defend its interests “until the end,” setting the stage for a protracted trade battle. According to the Peterson Institute for International Economics, the average US tariff on Chinese goods could reach over 25% if all threatened tariffs are implemented, potentially impacting consumer prices and supply chains.

Europe Responds: Seeking a Resolution Amidst Uncertainty

The European Union is formulating its response to the escalating trade tensions. A commission spokesperson indicated that the EU’s plan could be unveiled “early next week,” aiming to persuade President Trump to reconsider his trade policies. French President Emmanuel Macron, during a visit to Egypt, echoed this sentiment, emphasizing the need for a return to stability. The EU’s strategy is crucial,as the trade war could significantly impact European economies,particularly those heavily reliant on exports.

The objective is to arrive at a situation where President Trump returns to his decision. – President Emmanuel Macron

Market Volatility: A divergent Response

Global markets are exhibiting a mixed reaction to the ongoing trade disputes. European stock exchanges experienced a rebound, with Paris, Frankfurt, London, and Milan all posting gains after recent losses. However, Wall Street presented a contrasting picture, with the Dow Jones, NASDAQ, and S&P 500 indices all declining. This divergence highlights the uncertainty surrounding the trade war’s impact on different economies and sectors. Investors are closely monitoring developments, bracing for potential further volatility in the coming weeks. According to a recent report by Goldman Sachs, increased trade barriers could shave off 0.3% from global GDP growth in 2025.

Keywords

Keywords: Donald Trump, tailor-made agreements, China, European Union, tariffs, trade war, global markets, market volatility, US-China trade, trade tensions.