If Trump wins the election in 2024, how will the high - tariff policy affect the global economy?

With Donald Trumps victory in the 2024 US presidential election, the prospects of US trade policy have become more uncertain. Tariff policy was a signature initiative during Trumps first term as president, and during this years election campaign, Trump once again promised to impose a 20% tariff on all goods imported into the United States and a tariff of up to 60% on goods from China. If these plans are implemented, they may have a significant impact on US domestic consumption and the global economy.

A study released by the National Retail Federation (NRF) on October 4 shows that if Trumps new import tariff proposal is put into practice, US consumers purchasing power could be reduced by up to $78 billion annually. The study points out that the proposed tariffs will mainly affect consumer goods categories such as clothing, toys, furniture, appliances, footwear, and travel supplies, especially those products with China as the main supplier.

In the past few years, the United States has experienced high inflation, and consumers have become more thrifty, reducing non - essential spending, which has already hit the sales performance of US retailers and consumer goods companies. Jonathan Gold, vice president of the NRF responsible for supply chain and customs policy, said: Retailers rely heavily on imported products and manufacturing components so that they can provide customers with a wide variety of products at reasonable prices. However, Trumps tariff proposal will force importers to pay higher tariffs, and these costs will ultimately be passed on to consumers, driving up commodity prices and further weakening consumers purchasing power.

Not only that, the implementation of tariffs will have a greater impact on low - income families, further straining their budgets and increasing the cost of purchasing daily necessities. Although tariffs are paid by US importers, due to the high level of tariffs, retailers find it difficult to absorb these costs on their own and must pass them on to consumers. Take well - known brands such as Levis and Nike as examples. Some of their products come from countries like Mexico. Facing an increase in tariffs, they may have no choice but to raise prices and pass the costs on to end - consumers.

NRF预测，美国11月至12月的假日销售额将增长3.5%，达到9890亿美元，这将是六年来的最低水平。这一预测反映了关税政策对消费市场的负面影响，尤其是在假日购物季节，消费需求本应达到高峰，但由于关税导致的价格上涨，消费者的购买意愿可能受到抑制。

Trump not only proposed high tariffs on Chinese goods but also targeted the United States neighbor, Mexico. On October 29 local time, Trump announced at a campaign rally in Raleigh, North Carolina, that unless the Mexican government curbs illegal immigration across the border, once he is elected, he will impose a 25% tariff on all products imported from Mexico, and the tax rate may be upgraded to 100%. The potential impact of this plan is even more serious. According to a report from the Office of the United States Trade Representative, the total trade volume between the United States and Mexico in 2022 was approximately $855 billion, with nearly $500 billion coming from US imports of Mexican goods.

Trump said that if the Mexican government does not take measures to curb illegal immigration, he will immediately impose a 25% tariff on all items it exports to the United States. If the 25% tariff does not work, it will be gradually increased to 50%, 75%, or even 100%. This radical trade policy will not only impact the US economy but may also trigger a larger - scale trade war between China and the United States.

The National Institute of Economic and Social Research (NIESR) of the United Kingdom warned in a quarterly report released on November 6 that if Trump takes office and implements these tariff policies, the global GDP will shrink by 2% and trade volume will decline by 6% in five years. The report points out that the US economic size is expected to shrink by 3% - 4%, mainly because rising prices reduce consumer spending, and the Federal Reserve will raise key interest rates to curb inflation, thus weakening investment spending.

In addition, countries with close trade ties with the United States will also suffer significant losses. Mexicos economic size is expected to shrink by 5%, Canada by 3.5%, and countries such as the United Kingdom, Switzerland, Hungary, Poland, Singapore, South Korea, the Czech Republic, and Turkey will also face huge economic pressure. These countries will lose important export markets due to the adjustment of US tariff policies, leading to a slowdown in their domestic economic growth.

The US agricultural sector is particularly worried. Trumps tariff plan may cause US farmers to suffer losses of billions or even tens of billions of dollars. Economists from the National Corn Growers Association of the United States and the American Soybean Association pointed out in a report that if the economic losses of the trade war are similar to those during Trumps first - round trade war in 2018, US agricultural exports may be significantly reduced. Specifically, if China cancels the current tariff exemption for US soybeans, US soybean exports to China may decrease by as much as 16 million tons, a decrease of more than 50%; corn exports to China are expected to decrease by more than 84%, that is, 2.2 million tons. In a new round of trade war, if China imposes new retaliatory tariffs, the losses in the US agricultural product sector will be even more serious.

At the same time, as a major buyer of US corn, Mexicos purchases of US soybeans are also increasing. Data from the US Department of Agriculture shows that in the 2023/24 marketing year, China purchased approximately 24.4 million tons of US soybeans, while Mexico only purchased 4.8 million tons. However, Trumps threat to impose high tariffs on Mexican imports will further squeeze the share of US agricultural products in the Chinese and Mexican markets, forcing China to rely more on agricultural product supplies from South American countries such as Brazil.

Brazil is expected to be the biggest beneficiary of Trumps tariff policy. Krista Swanson, an economist at the National Corn Growers Association of the United States, said that as the trade war intensifies, Brazils agricultural sector will quickly fill the gap in the US agricultural product market. According to data from the US Department of Agriculture, since Brazils soybean production first exceeded that of the United States in 2012, its agricultural sector has been growing steadily. It is expected that by 2032, Brazil will account for nearly 61% of the global soybean export market share. Once US agricultural exports to China are restricted, Brazil will quickly increase its exports, driving up the demand for its agricultural products and export premiums.

In addition, Arlan Suderman, the chief commodity economist at StoneX Group, warned that if Trump is elected and restarts the trade war, it will quickly affect Chinas demand for US grains. However, regardless of who wins the general election on November 5, Chinas demand for US agricultural products may decline due to geopolitical tensions and price factors. Suderman pointed out: Tariffs are certainly part of the price equation, but fundamentally, China is also reducing its dependence on US grains.,

Facing the possible tariff policy, the US government and enterprises need to adopt more flexible and diversified strategies to cope with market changes. By strengthening trade cooperation with other countries, seeking new export markets, and enhancing the added value and competitiveness of agricultural products, the US agricultural sector can, to a certain extent, mitigate the impact of the trade war. At the same time, the government should also increase support for agricultural technology and innovation, improve agricultural production efficiency and product quality, so as to enhance competitiveness in the international market.

Overall, Trumps victory in the 2024 presidential election will not only have a profound impact on US trade policies but also bring significant changes to the global economic landscape and international trade relations. The implementation of high - tariff policies will force the readjustment of the global supply chain, affect consumers purchasing power, and suppress global economic growth. Therefore, governments and enterprises of various countries need to closely monitor changes in trade policies, actively adjust their strategies, and respond to potential economic shocks to ensure stability and competitiveness in the global market.