The Banking Executive Magazine - April 2025

global market stability, and ulti- mately, consumer prices. Trump Tar- iff policy will affect industries, influence the global supply chain dy- namics, and reshape international trade agreements. This article sheds light on Trump Tar- iff policy and its global impact at markets, industries, and consumer goods levels. The article also analy- ses the reaction of various countries with particular focus on Arab coun- tries and the EU, and the outcome of EU-Central Asia Samarkand Summit. The article concludes with a roadmap and strategies for Arab countries to address challenges ahead from the long-term impact of Trump Tariff policy. DONALD TRUMP TARIFF POLICY US President Donald Trump has placed 125% tariffs on goods im- ported from China, leading Beijing to respond with an 84% tax on Ameri- can products. Trump had also brought high tariffs on dozens of other countries but these have been suspended for 90 days. He argues that tariffs will boost US manufactur- ing and protect jobs, but the world economy has been thrown into chaos and prices are expected to rise for consumers. At its core, the rationale behind em- ploying tariffs is to rebalance trade by levying taxes on imported goods, ideally encouraging domestic pro- duction and counteracting what is seen as unfair foreign trade practices. However, economists warn that these taxes also tend to raise con- sumer prices, contribute to supply chain disruptions, and may trigger re- taliatory measures from affected countries. While Trump Tariffs are portrayed as a way to force negotia- tions and protect American indus- tries, they also risked deepening global economic uncertainties and setting the stage for a broader trade confrontation, particularly with China, whose targeted tariff increase underscores the severity of bilateral tensions. HISTORICAL TARIFF POLICIES IN THE US Historically, US tariff policies have swung between protectionism and free trade, depending on the eco- nomic and political climate. Since the mid-20th century, the US shifted towards trade liberalization, with agreements like the General Agree- ment on Tariffs and Trade (GATT) and the establishment of the World Trade Organization (WTO) reducing global tariffs. Trump's tariffs, by contrast, represent a significant departure from this trend, aiming to renegotiate trade deals and address perceived imbal- ances, particularly with China. While historical tariffs were often sector-specific, Trump's policies have ISSUE 196 APRIL 2025 the BANKING EXECUTIVE 9 Geopolitcal Alliances In Face Of New Tariffs