How to Navigate the New Global Trade Without the U.S.? (AI Translation)

【周刊提前读】风暴来临：如何应对没有美国的全球贸易新常态？

In the initial months of President Donald Trump's second term, the U.S. economy faces a mix of challenges and uncertainties driven by his policies, especially tariffs. Stock indices like the S&P 500 and Nasdaq Composite suffered significant losses, reflecting broader economic concerns. Despite a brief market stabilization by late March, Trump's tariff policies and spending cuts generate widespread uncertainty. Consumer confidence plummets, with indices from the University of Michigan and the Conference Board highlighting deep public skepticism about future economic conditions, especially among independent and Democratic voters[para. 1][para. 2].

This uncertainty transfers to business forecasts, impacting manufacturing and overall economic production expectations. Although manufacturing PMI slid back into contraction, the services sector showed some resilience. Nonetheless, economic sentiment indicators remain weak[para. 3][para. 4]. While Trump proposed tax cuts and policies designed to repatriate manufacturing, their effectiveness under existing conditions remains questionable. Economic indicators show a mixed picture—job market strength contrasts with declining consumer and business sentiments[para. 5][para. 6].

The Federal Reserve's cautious economic projections reflect these tensions, reducing expected GDP growth for 2025 from previous estimates. Jerome Powell underscores the disparity between "soft" survey-based indicators and "hard" data, yet uncertainties linger due to potential policy impacts[para. 7]. A significant trade deficit reported in January further complicates growth predictions, impacting GDP outlooks. While the deficit partly arises from increased gold imports not directly affecting GDP, it raises broader concerns about trade policy implications[para. 8][para. 9].

Concerns over Trump's tariffs, viewed as an initiation of a global trade war, loom large. The U.S. has significantly raised average tariff rates, forecasting broader economic repercussions. Countries like Mexico and Canada face immediate challenges, while possible retaliatory measures from other global economies remain a concerning yet unresolved issue. The global economic outlook remains cautious, with slowed growth forecasts linked to higher trade barriers and geopolitical uncertainties[para. 10][para. 11].

Trump's economic approach reflects a mix of aggressive budget cuts and controversial immigration policies, often drawing legal challenges and legislative pushback. Despite efforts led by figures like Elon Musk to reduce federal spending and agency sizes, the scale and impact of such measures remain limited against entrenched fiscal challenges. Proposed local and state government spending cuts face feasibility concerns due to jurisdictional limitations[para. 12][para. 13].

Trump's tariff-driven policy targets re-shore manufacturing through heightened trade barriers. However, these measures accompany rising administrative and operational costs, potentially curbing their intended economic benefits. International reactions vary, with some countries retaliating through tariffs while others seek diplomatic resolutions. The overall effectiveness of Trump's policies remains uncertain, as countries and businesses weigh the strategic costs of adaptation versus confrontation[para. 14][para. 15].

To mitigate these challenges, some economists suggest enhancing multilateral cooperation and reforming domestic policies to balance economic interests and counteract U.S. trade policies effectively. While extreme scenarios like "de-Americanization" of global trade appear far-fetched, the considerations highlight the potential shifts in international trade Landscape[para. 16][para. 17]. Despite ongoing debates and sporadic policy adjustments, the broader outlook for U.S. economic conditions remains mixed, leaving lasting impacts on both domestic and global economic landscapes.