US President Donald Trump intends to impose trade duties on imports from the BRICS countries. Market experts suggest that this measure will break global supply chains.
The new White House owner allowed 100 percent tariffs on imports of products manufactured in BRICS countries - Brazil, Russia, India, China, South Africa, the UAE, Egypt, Iran, Ethiopia and Indonesia. «We will introduce duties of at least 100% on the business they conduct with the US», he said.
Two days later, Donald Trump said that new 10% duties on imports from China could be introduced as early as February 1. Mexico and Canada also appear on the list of states that may suffer from the new round of trade war that Donald Trump began in his first term as president in 2017 against the European Union and the China.
«As for Mexico and Canada, we are talking about tariffs of approximately 25%», - said the US president. After his words, the stock market indices reflecting the value of Chinese stocks fell by 1-2%. By the way, against EU imports Donald Trump is also prepared to apply this tactic.
The outlook for 2025 is clouded by potential changes in US policy, including new or expanded tariffs that could disrupt global supply chains and affect key trading partners,” says the UN Conference on Trade and Development review (UNCTAD).
China and the EU are the most important exporters to the American market, says Alexander Danieltsev, director of the Institute of Trade Policy of the National Institute of Economic Studies.
According to the latest UN Comtrade data, BRICS countries bought $300 billion worth of goods in the US in 2023 and shipped $650 billion including machine-building products, electronics, home goods, plastic, steel, iron, and precious stones.
BRICS countries account for less than 20% of American imports, with China again accounting for three-quarters of this (14% of the total import of the United States). The second largest BRICS country is India (about 3% of total imports). China’s exports to America are $450-500 billion, while India - around $90 billion.
Closing the US market will lead to attempts to redirect these countries' exports to other markets, which will be very difficult to digest such volumes. As a result, there will be a risk of secondary restrictions on trade under the scheme «domino effect» from other countries», - predicts Alexander Daniltyshets.
By the way, this was already the situation in the Great Depression of the early 20th century, when the economic recession in the US and their use of protectionist measures to limit competition in their market almost caused the American crisis to spread throughout the world, Alexander Danieltsev recalled.
The previous trade war between the United States and the EU and PRC since 2017 has led to a decline in the countries' share of mutual trade. First of all, it is about the flow of goods from China, noted k.E.N., associate professor of international business RAE. Named by G.V. Plekhanova Anastasia Prikladova.
From 2017 to 2023, the US share of Chinese exports fell from 19% to 14.8%, and China’s share of American imports fell from 21.8% to 14.1%. The same is likely to happen if the US introduces barriers against BRICS countries.
This is confirmed by foreign trade statistics: from 2017 to 2023, the share of BRICS in Chinese exports increased from 6.8% to 9.2%. But the increase of BRICS share by these 2.4 percentage points (pp) did not fully compensate for the decrease of the US share by 4.2 p.p. in the mutual trade with BRICS.
According to Anastasia Prikadova, the new tariffs put America at risk of rising inflation in a context of commodity shortages, and international trade could be in chaos and uncertainty.
«We can talk about partial redirection of goods flows», - she clarified. Thus, in case of increased import duties for goods from BRICS countries, part of the product may be delivered to Russia. But, on the other hand, in BRICS countries there is a possibility of repeating the situation of 2022: then the forced reorientation of Russian export flows to Asian markets led to high traffic on the railway. In BRICS countries, this could be a deterrent to growth of mutual trade, the economist believes.
Overall, despite the optimism about growing container demand, the changing political environment may lead to instability and increased costs, especially as how traders will adapt to the impact of new tariffs and potential trade barriers,' - is reported in a review of global container online platform Container xChange.
New US tariffs may force logistics companies to build routes to other markets, as well as avoid direct deliveries, such as redirecting goods through third countries to the US.
This not only lengthens transit times, but also increases fuel consumption. At the same time, demand for both containers and transportation capacity increases.
"We expect to see continued changes in global trade patterns in the coming years under the Trump administration, which will likely lead to higher container demand and prices. These changing trade dynamics may ultimately favor the container industry, creating sustained demand for shipping and new capacity," predicted Container xChange.
Trump’s plans are extremely dangerous for the world economy, they can cause a slowdown in trade and economic growth in general, notes Alexander Danieltsev. According to the expert, trade flows between the largest market participants are always interconnected, and a sharp restriction of access to the US market as the world’s largest importer and consumer will lead to significant imbalances and disruptions.
«It is possible to expect a decline in the rate of world economic growth and especially global trade, which instead of expected growth compared with the period from 2020 to 2024 will be significantly lower than even in these adverse years after the pandemic», predicts Alexander Danilsev.
In his assessment, the measures announced by Trump will prove very painful for the United States itself. It is clear that GDP and import growth will slow down compared to the five-year period from 2020 to 2024. «However, the greatest damage will be done to US exports, which risk falling very significantly», - stressed the economist.
First, there will inevitably be a backlash from US partners that will restrict access for American goods to the world’s largest markets, especially China and the EU. Second, restricting supply to the US will require shifting production to other markets, where it will compete with and displace American products. US exports will suffer simultaneously from government trade-policy responses, increased global market failure and increased competition. Meanwhile, the US export growth rate from 2010 to 2014 was already somewhat lower than the global average.
«As a result, the effect on the American economy may also be manifested in the reduction of employment in the country against the background of the slowdown in growth and increasing difficulties in the export sector», - says Alexander Daniltytsev.
- February 2025
- January 2025
- December 2024
- November 2024
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021