No Major Changes Expected in Global Tariffs
Barclays experts believe that US trade policy toward countries outside China will remain unchanged. Despite the Trump administration’s temporary suspension of some tariffs, no fundamental shifts are expected. The 90-day pause followed sharp declines in stocks and a rise in Treasury yields. However, this pause did not eliminate tariffs on non-Chinese countries; rather, it maintained a base tariff of 10%.
China Targeted with High Tariffs
The US administration recently raised tariffs on China from 64% to nearly 150%. This brought the average US trade-weighted tariff to a relatively high 30%. In contrast, tariffs on other countries decreased from 17% to approximately 12%. This means that the trade impact remains significantly concentrated on China compared to the rest of the world.
Negotiations Focus on Neighboring Asian Countries
Barclays analysts expect Treasury Secretary Scott Besant to lead bilateral talks with Japan, Korea, and India. These talks aim to forge new trade agreements, but without any actual change to the current tariff structure. Experts believe that average tariffs on these countries will remain close to their current levels. According to expectations, these countries will not see significant tariff reductions in the coming months.
Tariffs are used as a political bargaining chip.
The Trump administration is believed to be using the threat of tariffs to pressure countries to reach permanent agreements. Reports indicate that the temporary 10% rate may be replaced by specific country-level agreements. This approach gives the United States greater negotiating leverage with its trading partners in Asia and beyond.
Market Reaction to the Temporary Decision
On the day the pause was announced, the S&P 500 rose 9.5%. However, this rebound was short-lived as tensions returned to the US bond market. Long-term Treasury yields subsequently declined, reflecting market concerns about continued uncertainty. Despite this volatility, the temporary pause helped markets catch their breath.
Economic Forecast: Mild Recession Looms
Barclays expects a continued mild recession in both the US and Europe. This is due to the uncertainty surrounding future trade relations and the ongoing impact of high tariffs. The bank believes that the imposition of high tariffs on China could weaken US economic activity later on, while stable tariffs in Europe could support limited growth in the eurozone.
Expected Trade Shifts in 2026
According to Barclays’ forecasts, US imports from China will gradually decline as the country shifts to alternative trading partners. Experts expect tariffs on China to fall to around 60% by 2026. Tariffs on other countries are expected to stabilize at 11%, with little change. Overall, the trade-weighted average is likely to stabilize at around 15%, slightly lower than before.
Global Trade Landscape
The United States has shown no intention of changing its trade policy outside of China.
The threat of tariffs is being used as leverage to gain negotiating advantage.
Markets have shown mixed reactions to the temporary pause.
Expectations indicate a gradual shift in trading partners over the coming years.
Average tariffs are expected to remain at moderate levels, with the exception of China. The current landscape may require close monitoring of shifts in US trade policy. Investors and analysts should monitor the impact of these shifts on global markets. If high tariffs persist, the global economy could slow further in 2025 and 2026. Therefore, international cooperation and fair trade agreements are essential to mitigate these long-term effects.
Expectations indicate a stabilization of average global tariffs.
According to Barclays’ forecasts, tariffs are likely to stabilize at an average of 15%. This represents a slight decrease from previous estimates, but it remains relatively high. Trade tensions are also expected to remain, especially with the upcoming US elections approaching. Politics may play a pivotal role in determining the shape of economic relations in the coming period.
Markets Watch and Anticipate
Financial markets react quickly to each new announcement regarding tariffs or trade policies. Stock and bond indices show clear volatility with each shift in official statements. Investors are therefore advised to exercise caution and rely on in-depth analysis rather than instant reactions. They are also advised to follow developments in bilateral negotiations between the US and Asian countries.
Resilience and Diversity Are Essential for the Future
It is essential for countries and companies to adopt flexible and diverse strategies to deal with challenges. Diversifying trading partners helps reduce the risks associated with reliance on specific markets. Developing domestic industries also reduces the economy’s sensitivity to external changes. Therefore, investing in infrastructure and innovation becomes more urgent than ever. The Barclays report paints a complex picture of the global trade situation, with elements of optimism tempered by clear caution. While the pause has temporarily calmed markets, major questions remain unanswered. Will these policies lead to long-term growth or exacerbate instability?
The answer depends on the outcome of upcoming negotiations and future US policy decisions. As the global economy continues to adapt to geopolitical changes, flexibility and careful monitoring become crucial. Every shift in tariffs impacts not only trade but also growth, employment, and financial markets. The economist believes that what is currently happening represents a real test of the ability of major economies to adapt to a volatile trade environment.
