The Pulse - The Trade War Chronicles: What's Next?

Understanding the impact of recent tariffs on global trade is just the tip of the iceberg in this in-depth conversation. We take a closer look at the dynamics shaping the current landscape under the Trump administration, exploring how protectionist measures play a role in altering relationships between countries. Unpacking how tariffs affect domestic industries and international commerce, we toggle between examining the economic necessity of such strategies and the potential consequences they usher in. 
From historical references highlighting past tariff practices to the implications of new regulations, we dissect the logistical ramifications and the pressing conversation surrounding sustainability. Among our discussions is the vital question of whether these policies can coexist with the ideals of globalization. As we navigate these intricate topics, join us in reflecting on how tariffs shape various aspects of business, from everyday consumer pricing to geopolitics. 
We extend an invitation to our listeners, encouraging insights and discussions about the future of trade amid escalating tensions. Whether you're a business leader, an economically-minded listener, or simply curious, this episode fosters an engaging dialogue about the path forward for global trade. We welcome your thoughts—please subscribe, share, and leave a review to help others join in the conversation!

You can follow Chain Reaction on LinkedIn, Twitter and Facebook

Chapters

• 0:02 Introduction to Chain Reaction Podcast
• 0:22 Overview of Current Global Trade Issues
• 0:44 The Impact of Trump's Tariff Strategy
• 4:19 Understanding the History Behind Tariffs
• 10:01 Balancing Protectionism and Globalization
• 22:31 Closing Remarks and Future Developments

Transcript

Tony Hines: 0:02

Hello, you're listening to the Chain Reaction podcast, all about supply chain advantage. This is the Pulse, the heartbeat of business weekly. Stick around, stay tuned, get informed and, if you like Chain Reaction, subscribe and you'll be first to know when new episodes are coming your way. Chain Reaction. Well, it's been a very busy week around the globe and, of course, macro events are still dominating and shaping the new landscape of geopolitics which impacts all of us in supply chains. And, of course, the new Trump administration in the United States is leading the chase. There isn't a day that goes past without a new tariff, a new announcement, a demand. It seems that every new announcement is a cry for attention or a demand for a resource, an attempt to influence structure and arrange the jigsaw pieces in a different way to suit the America First policies. Of course, the unelected person in the room appears to be President Trump's number two. He certainly speaks second almost at every event and he's upset and ruffled a few feathers. At the present, elon Musk, of course, is the world's richest man, worth about 365 billion US dollars. But there he is. He's looking after the efficiency through Doge and he's told the Fed workers they've got to justify their existence, so he's not the most popular guy right now. I think the worst aspect of all the public discussion is all the unfounded criticisms and claims where there's absolutely no evidence for claims being made, and the first story up demonstrates just that. It's about the slap of tariffs on the European Union. Tariffs on Canada and Mexico at 25% are to be introduced on March the 4th. Now that's the latest date, and the EU will follow shortly after. The date cited by President Trump in his first cabinet meeting said it would be April the 2nd. So is that an extension from the date of March 4th? It would appear so. So there's some confusion around the actual date that the tariffs will come in, but the tariffs are set to come in, according to the President. So a lot to catch up on. Stick around, stay tuned, stay informed. Well, this week President Trump held his first cabinet meeting and during that meeting he said that the duties against Canada and Mexico would take effect on April 2nd and his trade measures will include a 25% tariff on goods from the EU.

Tony Hines: 3:07

He claims that the economic and political bloc, the European Union, was formed to screw the US. His words, not mine. He went on to say that they've really taken advantage of us. They don't accept our cars. They don't accept essentially our farm products. They use all sorts of reasons why not, and we accept everything of them. They don't accept our cars. They don't accept essentially our farm products. They use all sorts of reasons why not, and we accept everything off them. This is all an attempt, of course, to reduce the trade deficit in the US, which is completely unsupported by the evidence that the EU's been formed to undermine the US. Well, the EU's been formed for a very long time and it wasn't the purpose to undermine the US. It was to make an economic union, which is what it is, and it's also a political union of member states, and it's to reduce frictions across the European country's borders.

Tony Hines: 4:01

European Union was established back in 1993, after the Maastricht Treaty, and it built on the post-war sentiment for the European Union to be an internal market, a political grouping to achieve sustainable development. Those are amongst the main names. So the statement is unfounded. The Treaty of the European Union was signed on February 7th 1992, and it came into force on the 1st of November 1993. The key principles were to create the European Union based on three pillars the European Communities, the Common Foreign and Security Policy and cooperation in the fields of justice and home affairs. The single market was established by the treaty and it allowed for the free movement of people, goods and services and money within the European Union. The treaty set out clear rules for the future single currency, the euro, and it laid the groundwork for the Economic and Monetary Union. The concept of European citizenship was also introduced, which granted citizens of member states the rights to move and reside freely within the EU, as well as the right to vote and stand in European and municipal elections in any member state. The treaty also established common policies in various areas, including foreign and security policy, justice and home affairs, and economic and social policy, and it also established institutional reforms. The treaty reformed the EU's institutions to make them more efficient and democratic, and it introduced the co-decision procedures, giving the European Parliament more say in decision-making. Three principles laid the foundations for the EU as we know it today promoting closer cooperation and integration among European countries.

Tony Hines: 5:56

So they were the reasons, and I can't see anywhere in that document or the Maastricht document that it says to screw the United States QED If you want to find more out about the tariffs and how they're affecting trade and what's likely to happen as a result of Trump's tariffs. Then go along and have a look at my two programs on tariffs. There's one making the case why and why not have tariffs and there's a second which talks about all the shenanigans of tariffs and what's happening. In the first month of President Trump's administration, president Trump also announced that an additional 10% of tariffs will be applied to China on the same date, april 2nd. The sweeping 25% tariffs on imports from Mexico and Canada were paused on February 3rd for a month, but recently there was some confusion as to whether they would go back into effect when the delays expired. In a Truth Social post this week, trump said they would. He claimed the illicit drugs are still pouring into our country from Mexico and Canada at very high and unacceptable levels. We can't allow this scourge to continue to harm the USA. And so he said they come back into force on March the 4th. He also announced that China, already facing 10% US tariffs on its products, will also be charged an additional 10% of tariffs on that date. He then added the April 2nd reciprocal tariff date will remain in full force. On the fact, so some confusion about the dates, I think at various times, of when they'll come into force, but on the news that they are coming into force, the Dow Jones futures turn negative because the markets are quite unhappy about these tariffs coming into play.

Tony Hines: 8:04

Tariffs have long been an essential tool in global trade policy, shaping economies and influencing political agendas. While their historical use is similar to the British tea tax placed on people in Massachusetts when the Boston Tea Party took place, the British tea tax might shed some light on the impact of tariffs on other goods, and no one better than the United States will know the impact In today's globalised economy. Tariffs often serve dual purposes. They're an economic tool. They protect domestic industries, making imports more expensive. They're used as a political lever to exert influence in trade negotiations or responding to perceived unfair practices, which is, of course, what President Trump has been going on about. A key example of modern tariffs is the wave of measures introduced during Donald Trump's presidency. These tariffs are designed to reduce trade deficits and protect US manufacturing sectors, particularly steel and aluminum, and protect US manufacturing sectors, particularly steel and aluminum.

Tony Hines: 9:12

While effective in some ways, such policies have sparked debates over whether they reflect a return to mercantilist principles, prioritizing national self-sufficiency over the free trade ideals of globalization. The economic and political impact often follows. If we take the domestic industry, protection tariffs can shield industries from foreign competition, fostering job creation and economic growth in the short term, but they often lead to increased cost for consumers and businesses reliant on imported materials. Tariffs can also strain international relations, leading to retaliatory actions that escalate into trade wars, and that's what's happening between the US and China and potentially other economies, with the tariffs recently imposed. And of course, we won't know until after the 2nd of April what the overall impact will be. The tension between free trade and protectionism remains central. Tariffs challenge the principle of globalization. They raise questions about the balance between open markets and safeguarding domestic economies. While tariffs might offer short-term economic benefits, their broader implications often include higher consumer prices, disrupted supply chains and strained diplomatic ties. In a world interconnected by trade, the resurgence of protectionist policies invites reflection on whether such measures can coexist with the aspirations of globalization or signal a shift towards a neo-Mercantilist regime.

Tony Hines: 11:00

The Fed's favourite core inflation measure has hit 2.6% in January, much as expected. It's increased by 0.3% for the month and showed an annual rate of 2.5%. If we exclude food and energy, the core PCE also rose by 0.3% for the month and achieved 2.6% annually. The Fed mainly focuses on the core measure as a better indicator of longer-term trends. Personal income gone up by 0.9% against expectations for a 0.4% increase, but the higher incomes hasn't translated into spending, which has decreased by 0.2% versus the forecast of a gain of 0.1%. So significantly different. 1% so significantly different.

Tony Hines: 11:49

Well, I don't know if you still use Skype. It was founded in 2003 by Niklas Zennström from Sweden and Janas Friis from Denmark, along with Estonian developers Arti Heinla, prilt Kassasalu and Jan Tallinn. It was announced at the end of this week that Skype will be closing. Microsoft announced it will be shutting down Skype on May 5, 2025, to focus on Microsoft Teams. The decision is part of Microsoft's strategy to streamline its communication offerings and invest in developing new features for teams, including artificial intelligence tools. Skype users have the option to migrate their conversation history and contacts to Teams or to export the data. But you'll have to be quick.

Tony Hines: 12:41

Microsoft acquired Skype for $8.5 billion in 2011. It was one of Microsoft's largest acquisitions at the time, which aimed to enhance their communication services by integrating Skype's popular video and voice calling features into their ecosystem. Well, very big investment Eight and a half billion in 2011, worth almost zero in 2025. That's just 14 years. They're closing it down. Microsoft Teams has got a long way to go. I think as well, because as a substitute for competitive products, I don't know about you, but I don't find it particularly good. I don't find it good to use. It's clunky and it's passable, but not much more. So I hope they do improve it quite a lot.

Tony Hines: 13:33

Well, donald Trump in the White House this week had a number of very important visitors. They all came to see the Don. It reminded me of that scene out of the Godfather, where the heads of the families line up to meet with the Don. It was a bit like that. We had Mr Macron from France, we had Mr Starmer or should I say Sir Kier Starmer, from the United Kingdom, the Prime Minister, and we had Mr Zelensky from Ukraine. And they were all there with similar reasons, with different outcomes, but the purpose, of course, was to establish participation and new arrangements for the potential peace that Mr Trump wants to introduce between Ukraine and Russia.

Tony Hines: 14:27

The Europeans were represented by Mr Macron, United Kingdom by Sir Kier Starma and Ukraine by President Zelensky. President Zelensky was there, of course, to sign the deal for rare earth metals. It was all very transactional, the meeting. What could each of them achieve to persuade Mr Trump to get Europe back in the room to discuss the issues, to get Mr Zelensky in the room to discuss the issues and the plans of Sir Kier Starmer to actually support and help Ukraine in the process, with the United States acting as a backstop. Well, we'll have to see how it develops. Sir Kier Starmer, of course, is likely to achieve a trade deal with the United States.

Tony Hines: 15:16

President Trump said then at the end of the meeting that it was likely they could do some kind of trade deal very quickly and the UK could avoid tariffs if that was the case, and the tariffs are being placed on the European Union. So from that point of view, from the United Kingdom's point of view, the meeting seemed to be a success. It did also for the French president, but in a different way, and we'll have to wait and see whether the meeting with President Zelensky offers new hope as well. Of course, president Trump was delighted to receive a letter from the King, king Charles in the UK, inviting him on a second state visit, and this is a unique invitation because he's the only person to be invited to the United Kingdom on two state visits. So President Trump seemed to be delighted with that and he accepted on the spot.

Tony Hines: 16:13

Well, the meeting between the President of the United States, the Vice President, jd Vence, and President Zelensky from Ukraine started off well and descended into chaos, clumsy accusations, poorly organized and the president claims he's a great negotiator, but there wasn't any great negotiation taking place in that particular meeting. Bullying by the US side and expecting a cap-in-hand approach, with no recognition of the fact that Russia was the aggressor by invading Ukraine in the first place a complete misunderstanding of the realities of the situation and insensitive to the needs of Ukraine. The focus on the US side seemed to be purely transactional and all about money and self-interest of the United States. A complete shambles, really. It was cringingly embarrassing and displayed for all the world to see on TV.

Tony Hines: 17:17

The European Union has implemented several regulations to promote sustainability and responsible business practices within supply chains, and two key regulations are the Corporate Sustainability Reporting Directive, csrd, and the Corporate Sustainability Due Diligence Act CSDD. The CSRD the Corporate Sustainability Reporting Directive requires companies to disclose detailed information on their environmental and social impact using standardised European sustainability reporting standards. The regulation impacts around 50,000 businesses across the EU, including non-EU companies with operations in Europe. Companies with operations in Europe. Companies must prove they're active in trying to reduce carbon emissions and managing sustainability within their supply chains. Under the Corporate Sustainability Due Diligence Act, they're obliged to identify and address adverse human rights and environmental impact in their operations and across their global value chain. The directive applies to large EU companies with over 1,000 employees and a turnover of more than €450 million, as well as large non-EU companies with significant operations in the EU. Companies must adopt transition plans for climate change mitigation aligned with the 2050 climate neutrality objective of the Paris Agreement.

Tony Hines: 18:50

The scope three emissions are the indirect greenhouse gas emissions that occur through a company's value chain, both upstream and downstream, and these emissions are often the most challenging to measure and manage, but they significantly impact a company's overall carbon footprint. Scope 3 emissions include all indirect emissions that occur in the upstream and downstream activities of the supply chain for an organization. The greenhouse gas protocol identifies 15 categories of scope 3 emission, such as purchased goods and services, transportation and distribution and the use of sold products. Measuring scope 3 emissions is critical. If you want to understand the full climate impact of a business and developing strategies that reduce those impacts, then you need to know how to measure them. Companies often face challenges in gathering accurate data from their suppliers and managing the complexity of those supply chains can be very challenging. The EU CSRD and CSDD regulations require companies to disclose their Scope 3 emissions and demonstrate efforts to reduce them, and companies have to prove that their actions have made a tangible impact in achieving that reduction of emissions.

Tony Hines: 20:14

Now there was an interesting story I read this week by Lindsay Clark. It was on Thursday, the 27th of February, and it was about the headline was 30-year-old NHS supply chain system hit by 35 major alerts in 11 months, and I picked this story up earlier in the year, but this was a good time to take a look again at the issue here. It says a state-owned company that handles 4.5 billion pounds worth that's, 5.7 billion7 billion worth of annual spend on behalf of the National Health Service, suffered 35 high-priority computer system alerts in 2024, leading to delays in shipping thousands of products to hospitals in the UK. It's a major supply chain issue for the health service. It's owned by the Department of Health and Social Care and the system is called RESUS to support the delivery of clinically assured medical products to medical facilities throughout England and Wales, and a recent court case revealed that the system was run by medical software company iSoft under an arcane public finance initiative. The NHS Supply Chain Coordination Limited, which runs the supply chain, and GXO Logistics, which won a recent £4.4 billion contract to run logistics services as an interested party, are at the heart of the matter, and on the other side are Unipart and DHL, which are contesting the contract award and have used the courts to get the contract delayed. The High Court judgment revealed that, amongst other things, according to the Register, needed to start work on the contract so it could begin the procurement of new computer systems, which are urgently needed. It's very difficult to get begin the procurement of new computer systems, which are urgently needed.

Tony Hines: 22:03

It's very difficult to get to the bottom of this information, because the report in the register gives most of the information, but you can't get to the public records to have a look at what went on. Those, I suspect, are only privy to government ministers, so you'll never know all the ins and outs of this particular story. Not very transparent, is it for a democracy? Well, that's it for this week. It's been a busy week. It's all been about what's happening in the White House in the United States, because that plays such a big role in shaping up the new world order. I'm Tony Hines, I'm signing off and I'll see you next time in the Chain Reaction Podcast. Take care bye, for now. You've been listening to the chain reaction podcast, written, presented and produced by tony hines.