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What the world got wrong about US tariffs
No economy rises or falls for just one reason, even a shock as big as Trump’s trade policy.
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Complex economies are rarely shaped by just one factor, not even a shock as big as US President Donald Trump’s tariffs.
PHOTO: AFP
Ruchir Sharma
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At the beginning of the year, the world was in striking agreement on one point: If US President Donald Trump went ahead with tariffs, it would strengthen the US dollar and trigger stagflation.
Chief executives, investors and commentators all said the same. Economists estimated that every percentage point increase in the tariff rate would shave 0.1 per cent off US growth and add 0.1 per cent to inflation.
