In this podcast episode, a follow-up from Episode 1, March 2025, I have Dr. Ajay Chhibber on the show again to discuss the significant changes and impacts of tariffs introduced by the Trump administration. Beginning with an announcement on April 9th, known as 'Liberation Day,' Trump's tariff policies have created substantial economic uncertainty. By applying tariffs based on the U.S. trade deficit in goods with various countries, major disparities emerged, with some nations facing tariffs as high as 40-50%. This led to a series of retaliatory tariffs, particularly between the U.S. and China, escalating into a severe trade war. The discussion covers the increase in the effective U.S. tariff rate from 3% before the Trump administration to 18% today, approaching levels seen during the 1930s. With major uncertainties looming around July 9th (termed 'Liberation Day 2.0'), potential outcomes include further tariff hikes, extensions for negotiations, or possible unilateral backtracking by Trump. The episode also examines the implications of these policies for global trade, potential recession risks in the United States, and the weakening influence of the World Trade Organization (WTO). Finally, countries are seeking new trade partnerships to reduce reliance on the U.S. market.
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