The sweeping tariffs imposed by the United States on a slew of countries are set to decimate the stability of the global economic order and disrupt global supply chains, said a former U.S. diplomat.
Trump signed an executive order last Wednesday imposing a 10-percent "minimum baseline tariff" on all imports, with elevated rates for specific countries. The impact of the policy has continued to ripple across the globe and triggered widespread panic on the global financial markets.
"This process of building tariff walls and then additional tariff walls from the other nations, it's going to have a significant impact on the way in which the global volume of trade dropped precipitously. As that happened then manufacturing began to decline, sales declined and people lost yet more jobs. It's going to have a confusing, complex, difficult, destabilizing relationship with the supply chains, almost every manufactured item of consequence is involved in some sort of supply chains that includes more than one nation. Supply chains destabilize, it has ripple effects in all kinds of ways that are hard to predict other than to say it's going to have an effect," said Brooks Spector, who now settles in South Africa after a career as a U.S. diplomat in Africa and East Asia, in an interview with China Central Television (CCTV).
Spector also said that for the United States itself, the additional tariffs would drive up prices and worsen inflation. Meanwhile, a hit to the stock market could shrink retirement funds and put U.S. household assets at risk.
"So many people in the U.S. now for their retirement are dependent on what are called 401k retirement plans - you take your money and you invest it in a fund which is then in turn invested in various versions of stock market or corporate or government bonds. With the fall in these funds, because they have dropped enormously in the last couple of weeks as a result of all this, people who were planning to retire are now really concerned that the funds that they thought they had locked away for their retirement have now been deeply cut," he said.
US tariffs undermine stability of global economic order: former US diplomat
US tariffs undermine stability of global economic order: former US diplomat
