As DB senior economist Peter Sidorov writes in his latest Wide Angle report published on Friday, and as anyone who has been active in the market in the past week will attest, using superlatives has become commonplace in describing policy announcements and market moves in recent weeks. Still, it's no understatement to say that this week's reciprocal tariff announcement by the US represents the most radical shift in global trade policy in recent decades.
So to address some of the confusion, Sidorov has published a note which takes stock of the tariff policy steps by the US administration to offer five big-picture perspectives:
- Historical perspective: The level of US tariffs is moving into unchartered territory (relative to the size of the economy).
- Fiscal perspective: The 2025 tariffs announced so far represent the largest US tax hike in over 50 years but how will this revenue be used?
- International perspective: Who will suffer most from US tariffs?
- Supply chain perspective: Can the rest of the world limit the decline in global trade?
- Capital flow perspective: The reciprocal tariffs likely increase the risks of other unorthodox steps down the line.
