President Donald Trump’s broad trade tariff threats are sowing confusion globally, with signs piling up of companies rejigging supply chains and boosting orders to avoid levies.
In announcements across several weeks, Trump vowed tariffs on automobiles, pharmaceuticals, chips, Mexico, Canada, China, steel and aluminum, as well as details of reciprocal tariffs on all trading partners by April. That’s prompted a quick response from companies, including industrial giants Glencore Plc rushing to ship copper to US shores and shoe retailer Steven Madden Ltd. planning price hikes. It’s also led to a record surge of activity at America’s busiest trade hub and an exports boost in Japan.
Bloomberg’s Trade Tracker in February showed three out of 10 key measures of international trade were in “below normal” zone, the most since May last year. Seven were in “normal territory.”
More volatile trade activity and rapid responses from corporations are the new normal as Trump’s tariff threats are met with increased protectionism around the world. The European Union is readying retaliation measures, while Canada, Mexico and China are among countries that vowed to protect their industries.
To add to the fluctuating trade environment, many nations have promised additional purchases from the US or are considering imposing their own restrictions on China in an effort to appease Trump. There’s also the looming threat of a tax on millions of small packages into the US, which Trump paused in February.
“President Trump’s tariff actions since his inauguration have been nothing short of striking,” wrote Goldman Sachs Group Inc. analysts in a February note. “While markets have begun to react to these developments, deep tariff risks are still being underpriced.”
There are still few details on the timing, scope and countries included in the forthcoming tariffs, particularly the reciprocal levies that Trump has previously categorized as “an eye for an eye.” Until there’s more clarity – which would confirm or dispel the notion that Trump is using these threats simply as a negotiating tool – firms will be forced to be reactive.
We’ve selected measures across shipping, sentiment and export volumes to watch. For the clearest indication, we measured how far each gauge is from historic norms. The data below update in real time from the Bloomberg Terminal and the text is updated at the end of each month.
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