Trump's Tariff Tsunami: How Global Trade Is Changing Forever

Donald Trump's self-proclaimed "Liberation Day" has unleashed a seismic shift in global trade, with new tariffs affecting 92 countries and reshaping economic relationships worldwide. What initially threatened as a uniform policy has evolved into a complex web of personalized trade barriers, with rates ranging from 10% for the UK to a punishing 50% for Brazil.

The diplomatic chess game has been fascinating to witness. Ursula von der Leyen's eleventh-hour visit to Turnberry secured the EU a 15% rate, down from potentially 30%, in exchange for investments in American energy and defense. Meanwhile, Canada faces 35% duties after angering Trump by planning to recognize Palestine, and Mexico received a temporary 90-day reprieve on tariffs that would have devastated fruit and vegetable exports. Most telling is Brazil's extra "40% free speech duty" - seemingly retribution against Brazilian courts pursuing a Trump ally rather than legitimate trade policy.

The economic impacts are already materializing in troubling ways. Global markets have dipped, with Germany's DAX and France's CAC 40 falling over 1%. The US jobs report showed just 73,000 positions added in July, far below expectations, while inflation is creeping upward. When these tariffs fully impact consumer prices, Americans will face higher costs across nearly everything they buy - Brazilian coffee (+50%), European foods (+15%), clothing, electronics, cars, and construction materials. The administration's failure to acknowledge the deeply interconnected nature of global supply chains means these policies will likely cause significant economic disruption without achieving their stated goals of bringing manufacturing back to American shores. Even if production returns, the higher cost structure in the US means consumers will still pay more - revealing the fundamental contradiction at the heart of economic nationalism. What's your take on how these tariffs will affect your purchasing power in the coming months?

Chapters

• 0:00 UK Inflation and Economic Pressures
• 2:06 Trump's Liberation Day and Tariff Implementation
• 4:46 Global Economic Impact Assessment
• 9:16 Trump's Tariff Strategy and Consequences
• 15:46 American Consumer Impact and Supply Chains
• 20:16 The Hidden Costs of Economic Nationalism

Transcript

Tony Hines: 0:32

Hello, welcome to the episode and I hope you're going to enjoy it today. Well, in the news this week, food inflation is expected to rise in the United Kingdom, going up to 6%. It's already around 4.5%. But the other thing I did notice earlier in the week was a report saying that gluten-free food is even higher. So that's likely to go up even more. It's already at around 5% 6% and that could be even higher. That could be 9% 10% by the end of the year. So lots of prices going up, inflation on the way. And then another piece of news that's out this week about the UK economy is that many companies and many firms are experiencing big rises in their costs and it's now a fact. It's coming through on the data and the evidence that the national insurance charges and those minimum wage increases earlier in the year are having a big impact on companies, especially in industries like hospitality.

Tony Hines: 1:35

Well, it's about four months since Donald Trump came out and said it was Liberation Day that was on the 1st of April in 2025. And there were new tariffs set in motion, supposedly to come in force on the 1st of August. They won't actually come into force till a week later and they're not quite as bad as they at first appeared for some big players like the European Union, who managed to get a last-minute deal over the line with Ursula von der Leyen's visit to Turnberry Golf Course, where President Trump was based during a visit to Scotland. The 30% tariffs set to come into force in Mexico, which would severely impact fruit and vegetables, have been delayed for 90 days. But they will have a big impact on American consumers if they come through the pipeline, but it's expected that something will happen before then. Meanwhile, canada has angered the pipeline, but it's expected that something will happen before then. Meanwhile, canada has angered the President partly by planning to recognise Palestine as a state and it will face 35% duties. But the main reason, of course, is he blames Canada for fentanyl imports. He thinks that's a route into the United States for fentanyl and he wants the Canadian government to do more.

Tony Hines: 3:02

Of course, lots of rhetoric surround President Trump's anger towards other nations. When he talks about these tariffs, he thinks exporters unfairly cheat America, and I announced a range of tariffs from 10% to 41%. In the past week, the European Union, japan and South Korea have all struck deals with Mr Trump where they promised to open their markets and put investment into the United States and, in return, their exports will have tariffs of just 15%. The President, of course, has pressed forward with tariffs, and the customs duties that are coming into the United States brought in about $30 billion in a month. Those countries that are seen to reroute trade through places with lower duties will be punished, said Mr Trump. To re-route trade through places with lower duties will be punished, said Mr Trump, and those trans-shipment exports coming into the US will have tariffs of 40%. So there's a little threat to everybody thinking about re-routing trade.

Tony Hines: 4:14

He's put the tariffs up against Brazil and it's supposedly an attack on free speech. The extra 40% he's put up there. But it seems that an ally of Mr Trump is currently being pursued by Brazilian courts and that might be the real reason behind that increased tariff. And that might be the real reason behind that increased tariff. And it's a presidential gift. I can tariff anyone I like. That's his approach, and he gives exemptions to countries that flatter him. American consumers, of course, will ultimately pay the price. At the moment, they're buffeted by the companies who are importing the goods, and that's because they're taking some of the tariff hits out of their profits. But it will mean lower profits for American companies and, of course, eventually it will trickle down to consumers. If we look in detail at some of those tariffs, the United Kingdom is still on 10%, and that was because of the deal secured with Donald Trump.

Tony Hines: 5:22

The European Union has a range of tariffs, the highest, of course, reciprocal, 15%, and that was reduced from 20% after a recent agreement. It was rumoured that it was going to be 30%, but then it went to 20% and it's finally at 15%. India has 25% tariffs and that's because of long-standing trade barriers. Brazil has a tariff of 50%, which includes a 40% free speech duty, apparently. Canada, 35%, linked to fentanyl trade concerns. China at the moment was exempted from the latest tariff round and it's covered under various separate trade orders. It's all very complicated, isn't it? And Thailand on 19%, a deal reached after border conflict ceasefire. Switzerland 39% because no deal's been finalized. And Syria has the highest rate imposed at 41%, and that's what it looks like, but it's a terribly complicated picture and it seems to get more complicated every time tariffs are mentioned.

Tony Hines: 6:37

If we take a little look at the economic news this week, three specific areas We'll take a look at the United Kingdom, the European Union and the United States. In the United Kingdom GDP and growth forecasts grew by 0.7% in the first quarter of 2025, but forecasts for the rest of the year have been downgraded due to rising costs and trade pressures. Have been downgraded due to rising costs and trade pressures. Those rising costs, of course, haven't been helped by the UK government's policies raising national insurance for employers, which is an employment tax effectively, and the rise in the minimum wage, which has put pressure on low-paid sectors such as hospitality. June's inflation came in higher than expected, also driven by food and fuel prices. The Consumer Price Index saw its steepest rise since January 2024. And going to employment, the jobless rate rose to 4.6% and wage growth has moderated to 4.9%. It's slowest pace since mid-2022.

Tony Hines: 7:49

There are still some big headaches for the UK government as well, because there's a junior doctor strike which is causing problems for the National Health Service, causing problems for the National Health Service, and they want a pay rise in excess of the 5.9% that they've been offered, and that's in addition to the previous over 20%. I think it was about 29% that they were paid in the pay rise when the Labour government came to power to try and put the back pay in order. So there's a spat going on between Wes Streeting, who's the Minister for Health, with the junior doctors, and the British Medical Association, which is effectively the union representation. Interest rate speculation is also mounting that the Bank of England may cut rates at the next meeting on August 7th, amid signs of economic weakness, and many think this is a difficult decision because it might impact other things, for example, the interest rate. If it's lowered could also have an impact on the exchange rate, because perhaps fewer people will want to buy pounds on the foreign currency markets.

Tony Hines: 9:12

In the European Union, gross domestic product grew by just 0.1% in quarter 2, and that's a sharp downturn from quarter 1's 0.6%, and it's largely due to the reversal of pre-tariff export surges. Germany and Italy both saw 0.1% contractions, while France posted modest growth thanks to inventory build-up. Inflation in the Eurozone is hovering about 2%, which is the ECB's target, the European Central Bank's target. July's CPI data is expected to clarify the trend. Unemployment in the Eurozone edged down to 6.2%, showing resilience despite broader headwinds and trade tensions. Well, they're still grappling with the new 15% US tariffs, which could subtract about 0.2% from regional GDP. So these tariffs are having an effect, an impact on the gross domestic product of other countries, which is quite significant, and it's all part of President Trump's attempt to rebalance, because he says, as we've already mentioned, that he thinks other people are taking advantage. The facts don't support that, but that's what he thinks.

Tony Hines: 10:38

In the United States, the jobs report in July saw just 73,000 jobs added, and that's far below expectations. Jobs added and that's far below expectations. Revisions to May and June figures revealed a net gain of only 33,000 jobs over two months and in fact, president Trump fired the head of the Bureau of Labor Statistics over the week job report, sparking controversy over data integrity. It's something like don't shoot the messenger, isn't it? But he blames the person who delivered the statistics, which is strange, but it's political too, because the lady involved was President Biden's appointment. So you know what's going on there.

Tony Hines: 11:26

Unemployment rose slightly to 4.2% in the United States, with most gains concentrated in healthcare. Manufacturing and construction remained flat. Gdp growth in Q2 hit 3%, beating forecast, but much of it stemmed from reduced imports rather than domestic strength. Because of all the tariffs Inflation, the Fed's preferred measure rose 0.3% in June, suggesting tariffs may be pushing prices higher. So the data is showing that prices are starting to creep up and they're not being absorbed I don't suppose anymore by many of the companies who try to balance them out. But again, you know that President Trump wants to replace the head of the Fed because those are another set of statistics and he doesn't like the higher interest rates which he thinks are holding the United States back. The Fed rates held steady at 4.25% to 4.5%, but markets now do expect a cut in September, so perhaps the head of the Fed will just about manage to stay in post if that happens.

Tony Hines: 12:39

So, looking ahead, I suppose Trump's tariff blitz on 92 countries is having some effect both on the rest of the world and on the United States, and it's sparking fears of a renewed global trade war. European markets have dipped this week, with Germany's DAX and France's CAC 40 both falling over 1%, and economists have warned of disrupted supply chains and rising consumer prices. Though the uniform tariff rate may soften the blows, the new US-EU trade pact was struck, setting a 15% tariff, and that was good news for the EU, given the state of play presently. The EU agreed to increase investments in US energy and defence sectors, prompting backlash from other European leaders who feel the deal is one-sided. The agreement is expected to reshape transatlantic industries, especially automotive and pharmaceuticals, and I read, I think, an article this week that said President Trump has written to 17 pharmaceutical companies asking them to lower their prices for pharma products to the United States. He wants them to come lower and of course, that could have impact on those pharma products trying to get profits and extract profits elsewhere in the globe from countries who can ill afford to pay. There will be winners and losers as we move ahead.

Tony Hines: 14:09

The UK secured exemptions from aerospace and steel, with car exports facing reduced tariffs under a quota system. Canada, brazil and Mexico are still facing 30-35% tariffs with no deals in place, and Brazil, in fact, facing higher tariffs at present. China's avoided the hardest penalties after agreeing a truce, though tension remains high. Lithium supply is under pressure. The International Energy Agency has warned that lithium demand could rise 40-fold by 2040, and that threatens the clean energy transition. Of course, president Trump won't be bothered about that. He doesn't seem to be bothered about the transition to clean energy. He's drilling for oil. Supply chain bottlenecks and geopolitical risks are complicating efforts to meet climate goals and the IMF has revised its global growth forecasts. The IMF upgraded growth to 3% for 2025, citing resilience despite trade tensions. Tariffs have raised about 108 billion for the US Treasury but risks global stability.

Tony Hines: 15:22

So, when it comes to Trump's tariffs, what will it mean for American consumers? Well, think of all the things that come in from all different parts of the world to the United States, and I'm thinking here of various consumer products. If we think of clothing and footwear, most of that comes in from other countries. It's made in places like Vietnam, china, bangladesh and elsewhere. Trump backed down from the very steep tariffs he was threatening early on, when everything was 100% or more, but they're still going to be high and they've been at different rates at different times 30% on goods from China, 20% on items from Vietnam and Bangladesh, and Indonesia has high tariffs too, and those are all places where those goods come in from. It'll affect big retailers Walmart, target, home Depot and brand names like Nike, levi Strauss and others will all be impacted by the high prices. That tariffs will add to the cost of goods.

Tony Hines: 16:39

If you get your coffee from Brazil, you'll have 50% as a tariff on coffee. If you get your coffee from Vietnam, 20%. All the food products coming in from places like Italy, spain, greece and the European Union they'll be up by 15%. And then all the fruit products, fruit and vegetables that come in from Mexico. Well, they could be 30%. We don't know yet there's a 90-day moratorium in place on those things, so we'll have to see what happens.

Tony Hines: 17:19

Any imported beers or alcoholic drinks will also carry tariffs and, of course, for big ticket items such as cars and white goods, they will also carry tariffs. And then what about those car parts coming in from Canada and from Mexico? They might be able to get a hold of powdered aluminum from Tennessee. They might be able to turn it into rods in Pennsylvania, rods that are shaped and polished in Canada Before being imported to Mexico for assembly into pistons, and the pistons then become part of engines in Michigan. There's energy and fuel, there's things for household goods, there's things for construction, there's things for household goods, there's things for construction, and all those tariffs will add to your household bills. Delivery trucks, computers, cars, telephones, broadcast equipment, refined petroleum, crude petroleum, electric batteries, wire products all carrying tariffs.

Tony Hines: 18:36

The thing is and I think what the Trump administration has failed to acknowledge is the interconnections in global supply chains that exist and they're not going to be removed easily. Businesses have been working to make those connections for years. To get those global supply chains working effectively, to dismantle them will take more than a few tariffs. It will just add to cost. It'll push prices up for consumers, and people are not going to be happy when they see the real impact of those tariffs on their purse, on their wallet, on their bank accounts and, of course, on their jobs. Their employment might disappear as a result of tariffs.

Tony Hines: 19:35

We know that President Trump hopes that everything will return to America and people will make goods in America rather than elsewhere in the world. But even if that were to happen, the prices will go up because it's not inexpensive to make goods in the United States. It's a lot more expensive than many other parts of the world where those goods already come from, and so things will go up in price. But it takes time for all these things to take shape. It can't be done instantly. There's a great lack of detail and thoughtfulness. That just hasn't happened when thinking about tariffs and applying them. It's just top of the head stuff. Let's have a tariff on this, let's put that tariff in place. That'll give us revenue, bring the revenue in from elsewhere. Other countries will pay our taxes. And well, does that really happen without consequence? Well, the answer is clearly no.