Economists are warning of a potentially sharp hit to the global economy and markets, spurred by President Trump's imposition of steel and aluminum tariffs, Axios Future of Work editor Steve LeVine notes.
An immediate example: Europe is preparing 25% tariffs on U.S. goods from Levi's to Harley Davidson bikes in a sign of brewing retaliation.
How a tariff retaliation back-and-forth could hit the global economy:
- Prolonged stock market declines triggered by a low-grade exchange of high tariffs, John Ferguson, director of global forecasting for the Economist Intelligence Unit, tells Axios.
- Companies pull back capital spending plans.
- Consumers curtail their spending because they have less money in their pocket than expected.
- Global GDP growth suffers due to its reliance on capital and consumer spending.