Trump wants to increase all global order. Can he endure the price?

Global stock markets were erased by over $ 2 trillion on Thursday, when investors reacted to the common new tariffs of Donald Trump. The markets were surprised by how steep and how wide the tariffs were.

“Markets voted-it is of course bad for us and the world,” said Derek Holt, vice president and head of economics of capital markets in Scotiabank.

The sale emphasizes the key question at the Trump Trade Policy Center, which he announced on Wednesday. The United States imposes a 10 % minimum tariff in almost every country, and some nations receive a higher so-called “mutual” fee, like China, at 34 percent, in the amount of 20 percent and Vietnam at 46 percent.

On the one hand, the US President wants to increase 70 years of global trade and fundamentally change the way the world conducts activity. But it also transfers exemptions to protect American companies, as in the automotive industry and Taiwanese semiconductors.

One message set for market sale: Trump cannot have it both ways.

“The United States cannot have their dough and food too,” says Karl Schamotta, the main strategist of the market at the Corpay financial services company.

Schamotta claims that the US has built a global trade system over the past 70 years and has been its main beneficiary.

“If you repeal this world order, you will pay costs,” he says.

“The question is whether (Trump) will have a stomach to stick to it and withstand political pressure and negative consequences that will be (this policy).”

Automaks stop production

Stock market markets are not the only ones showing signs of pain.

A few hours after tariff announcement, Stellantis, owner of Marek Jeep and RAM, Detained production in some plants In Canada and Mexico. It was widely expected because a separate 25 % Trump tariff would apply to all non -American parts used in vehicles made outside the USA

But closing production in these plants will affect American production. For Stellantis, Pause will affect some of the American propulsion and stamping plants that support these factories.

This will lead to dismissals of American employees.

Pause affects about 3,200 people in Canada and about 900 in the USA, said Stellantis in a statement for CBC News.

So investors lose their shirts. American employees are released and the tariffs have not yet been fully imposed. Meanwhile, Canada passed a fathering 25 -percent tariff on American vehicles.

Elder economist BMO, Sal Guatieri, says that we have no way to learn how much worse things will be.

“The most important question is: how aggressively other retaliation countries, and then the president progresses with threatened remedies, dramatically escalating the trade war and increasing the risk of global recession and the USA?” wrote Gwatieri.

Textiles, food most exposed to tariffs

Tariffs are a tax on American companies. Budget laboratory at the University of Yale he mumbled the numbers and found Wednesday's announcement accelerated the average effective rate of tariffs in the USA to 22.5 percent, the highest from 1909.

Ernie Tedeschi, economic director of the budget laboratory, claims that the new tariffs will increase by 1.3 percent. This means that the purchasing power of each household will drop by an average of USD 2,300 per year he wrote in a post on social media. He said that all this year's tariffs would raise prices by 2.3 percent, which is an average loss of USD 3,800.

The budget laboratory said that so far Trump's most exposed products are textiles and clothing. He says that the prices of textiles will increase by up to 17 percent when all the tariffs announced so far are fully implemented.

The food will also be disproportionately hit, it will increase by 2.8 percent of all fees.

It is from the president who was elected in a considerable part by voters who were worried about the growing costs of living.

The secretary of Trump's trade, Howard Lutnick, made rounds on financial information channels because the markets are sold on Thursday. Bloomberg supervision The host Jonathan Ferro asked a question that overshadows the whole trade policy: “How much pain do you want to tolerate? How much market pain do you want to tolerate?”

Lutnick, who was successful, the investment tycoon, who has long been a friend of the president, met with criticism as one of the votes in administration, pressing the higher, more difficult tariffs, regardless of the costs.

“It will happen, people are aware that this great American economy is a winner here. And everyone who doubts it and everyone who returns Donald Trump, or anyone who doubts the strength and strength of the American economy, makes a stupid plant,” said Lutnick.

However, he continued that these tariffs would mean difficulties for anyone who buys many of us outside the USA

“Sure, importers will have difficulty determining what to do because they have gone and found the cheapest production in the world. Time to bring this production home.”

In other words, he wants American companies that produce a cheap working force to repatriate this production in the USA, where they would have to pay more to employees. Which would increase the price of American consumers.

The question in the coming weeks and months sounds whether the administration will stick to the weapon and press on this repatriation, regardless of the price it will pay when consumers constantly increase the action tank and prices.