US tariff policy is changing the world economic landscape

Author：NickyDate：2025-4-28

    As the US government continues to abuse tariffs, global trade tensions are intensifying, seriously disrupting the world economy and trade order. Polish economist Olowski pointed out that the US abuse of tariffs has a negative impact not only on itself but also on the global economy. The US tariff policy has accelerated the fragmentation of the global economy and changed the economic interactions between multinational corporations and countries. The increase in tariffs has led to a reassessment and adjustment of the global supply chain, especially multinational corporations have to move production and supply chains from traditional low-cost countries (especially China) to other low-tariff regions. According to the World Bank, between 2018 and 2020, the tariffs imposed by the United States caused China's exports to the United States to fall by about 16%, while US imports from China fell by 11%. As more and more production links move out of the United States, this policy directly interferes with the process of globalization and has a long-term negative impact on global cross-border investment.

    The US tariffs have had a profound impact on economies that rely on the US market. According to the Global Economic Outlook report released by OCD in March, the US tariff policy will lead to a shrinkage in global trade, and global economic growth is expected to be reduced by 0.2 and 0.3 percentage points in 2025 and 2026, respectively, to 3.1% and 3.0%. Economies that rely heavily on exports to the United States, especially those that mainly export low-end goods, face a greater impact. Take Vietnam as an example. In 2024, exports to the United States accounted for 29.5% of its total exports, of which labor-intensive goods (such as furniture, toys, and clothing) accounted for about 40%. Because these goods have low profit margins and are easy to replace, the US tariffs will seriously affect Vietnam's exports, thereby hitting its economic growth. Against the backdrop of Sino-US trade frictions, many Chinese companies have transferred production to Vietnam, but the high tariffs imposed by the United States on Vietnam will slow down this trend and affect the pace of investment by Chinese companies in Vietnam. In addition, Mexico abolished its import tariffs on US corn after signing the North American Free Trade Agreement, but this has caused a shock to its local corn planting industry. In 2024, Mexico's corn production is expected to fall to 23.3 million tons, the lowest level since 2014, and the corn planting area has also decreased from 7.7 million hectares to more than 7 million hectares. According to the U.S. Department of Agriculture, Mexico will import 24 million tons of corn from the United States in 2024, accounting for more than 40% of its annual consumption. This change has brought significant pressure on the Mexican agricultural market.

    In response to the previous tariff actions of the United States, the European Union and Canada have responded in retaliation. After the United States imposed tariffs on its steel and aluminum products, the European Union immediately implemented a reciprocal tariff policy covering a number of U.S. exports. Canada, on the other hand, imposed tariffs on billions of dollars worth of U.S. goods and called for redefining its economic relationship with the United States in future trade negotiations. More importantly, these countries have gradually reduced their dependence on the U.S. market and begun to increase economic cooperation with China and other emerging markets.

    In summary, the U.S. tariff policy is changing the world economic landscape, affecting the layout of the global supply chain, forcing companies to re-examine the layout of production and procurement, and bringing new challenges to companies, as the globalized and efficient supply chain is gradually replaced by regionalization and localization.