As July 9 approaches, announcements and concerns about tariffs are back in the headlines. On April 2, Liberation Day, Donald Trump announced tariffs ranging from 10 to 50%, depending on the country, on products entering the United States. A week later, only the 10% rate remained in place for all but China. The White House then gave all countries 90 days to negotiate a trade agreement with the United States.
This strategy has not been very effective since Great Britain and more recently Vietnam signed a trade agreement protocol.

The 90-day deadline expires on July 9, but Washington has already indicated that 25% tariffs will be imposed on Japan and South Korea as early as August 1. The announcements will be phased in until August 1, depending on the progress of the negotiations.

This hardline strategy was thought to have been ruled out due to the warnings that had appeared on the financial markets around April 2 and in view of the enormous American financing needs.

Yet Trump is back at it again. And one can understand the reason for this stubbornness. Since Ronald Reagan, the global economic cycle has been dependent on American household consumption. This household spending represents 70% of American GDP, the highest level by far among developed countries.

The American market has opened up to everyone. China, whose economic opening to the world dates back to the early 2000s, has rushed in, generating a considerable surplus. Europe has a spectacular surplus with the United States. Other countries in Asia have also seen their cycles depend on Mr. Smith from Ohio and Mrs. Suarez from Texas.
The economic cycle of many countries has thus become dependent on the behavior of the US consumer.

The American trap closes when, suddenly, a tax must be paid to continue exporting goods to the USA. To continue to be able to work with the US, because it is essential to the economic cycle almost everywhere in the world, countries will agree to be penalized by this tax.
This will result in transfers to the benefit of the United States. This is evident in the increase in customs duties collected by the US Treasury.
This strategy, which is not necessarily collectively effective, also reflects the rest of the world’s inability to be self-sufficient. The American market, so vast and attractive for so long, is trapping the entire world.

However, China, Russia, and India have become economically powerful countries that will want to write history differently. We will have to write the future without being directly dependent on Mr. Smith and Mrs. Suarez. In the short term, the spotlight is on the United States. In the medium term, other lights will shine, testifying to a more dispersed economy, less dependent on the American consumer. This is the greatest upheaval.