Global orange instantly increased from 10% to 15% Trump’s announcement on February 21 comes amid tensions between the Supreme Court’s failure to strike down his “reciprocal” tariffs, which could be considered unconstitutional because they were not approved by Congress.
The US President decided to use the 1974 Maximum Legal Margin Trade Act to impose a “temporary” orange, ultimately 10%, though he announced 15%, on all items imported into the United States. And with that, the sense of chaos increases.
It is not clear how it will be largely articulated. Since Section 122 of the Trade Act of 1974, in which the President is in power, oranges are allowed to be imposed for a period of up to 150 days, if any. “fundamental balance of payments problems that require import restrictions”. Congressional approval is required to maintain it longer.
It is likely that during this time, the Trump administration intends to rebuild the orangery wall as it was before the Supreme Court decision. However, for this reason it would tend to revert to full clauses that require a case-by-case investigation, which will take time and be less flexible than the reciprocal orange before the Supreme decision.
What is certain is that the North American government is obliged to pay at least $175,000 million (and counting) to importers for inputs caught by mutual oranges, now declared illegal.
Orange varieties affect international trade not only by exporting to the USA, but mainly by the greater uncertainty that it brings to business relations
Transferring these funds will be an extensive and legally complex process. Moreover, only the direct importing companies will benefit from the compensation, and not the final consumers, who will be satisfied with a large part of the sales of oranges through price increases.
The Trump administration is once again bringing uncertainty to international trade. The 2025 bilateral agreement with the European Union envisaged a generalized 15% for all products, which indicated the competitive trend of EU countries compared to China and other major geopolitical blocs.
Now this new global orange of 10% for all countries could be added to the price that already existed for each other’s oranges, so the total would vary enormously from product to product and in many cases exceed the 15% of last August.
The effects of this new orange are on a global level. Countries that have enough higher oranges in their possession to benefit from them now is the case of China or Brazil. At least temporarily, yes The United States is working with other legal instruments to return to the previous mark.
Orange varieties affect international trade not only for trade with exports to the USA, but mainly for the greater uncertainty it brings to trade relations and for possible reprisals or drugs, especially from China, the EU, India or Brazil.
US trade policy deepens the loss of confidence in multilateralism
Because although many countries will receive a less effective orange than is applied with declared illegal tariffs, the political signal is clearly hostile. All this can accelerate alternative trade activities in the EU and demands before the World Trade Organization.
The result is the disorganization of global government agenciesand tensions from the pandemic and geopolitical tensions. This results in increased logistics and production costs in industries such as automotive, electronics and engineering. It can also be used to suspend some contracts for a short period of time and force a renegotiation.
Similarity may affect a partial shift of production to the US or to countries unaffected by future additional oranges if introduced selectively.
In general, multiplying additional columns will tend to affect inflation. It may put pressure on central banks to withdraw or suspend lower interest rates, which, on the other hand, will have to face a weakened economic environment.
So this is a shameful context for inversion. Indeed, in recent days we have seen an increase in volatility in the world’s stock markets and a reversal tendency to resort to safe assets such as money, gold or dollars.
This financial turbulence is not helped by channeling the horror that leads to a productive turnover of companies. Indeed, some companies anticipate scenarios of productive displacement and reduced inversions. And today’s inversion is economic growth and employment.
In short, the EU’s trade policy deepens the loss of confidence in multilateralism and refutes the sense of regulatory instability that has entered the global economy.
The problem is not only that the first world power is using all legal means to impose unilateral tariffs, thereby weakening the credibility of the system that has governed international economic relations since the end of the Second World War – US President Trump, with his latest decision, implemented this as the only available legal way through the fault of the Supreme Court and imposed maximum authority -.
There is also less response from the EU towards the completion of the single market, leading to a turnover in the production structure of the old continent and Send your negotiating skills ahead of Trump’s orange and geopolitical chaos.
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