Biznes Fakty
Economists on Trump's tariffs: They're bullets flying in all directions
– The customs duties in the United States have been elevated to levels reminiscent of the turn of the 19th and 20th centuries. This is unprecedented in the modern history of international relations – stated Prof. Dariusz Rosati, an economist and former member of the Monetary Policy Council, during „Fakty po Faktach”. Dr. Sławomir Dudek, on the other hand, referred to the tariffs as „bullets being fired in all directions”.
As of last Thursday, a 25 percent tariff on vehicles and light trucks imported to the United States has taken effect. Vehicles from Mexico and Canada are partially exempt, while a tax on imported car parts and computers is set to be introduced on May 3. In response, Prime Minister Donald Tusk has convened a meeting with representatives from the automotive sector to discuss the tariffs.
When asked on TVN24 about the repercussions of the tariffs instituted by the USA, Dariusz Rosati highlighted that this represents „a significant shock to the global economy, including Poland”.
– We will feel the impact directly, as we export to the United States. This amounts to 13 billion zlotys, which may decline to 10 or 8 billion. However, the more significant blow will likely come from our substantial exports of automotive parts to Germany. The exports from Germany in terms of cars are very considerable. Thus, we will regrettably face serious challenges here as well – remarked the guest on „Fakty po Faktach”.
– Overall, it is estimated to be around 0.4-0.5 percent of GDP. This is indeed a considerable amount. It translates to 15-20 billion zlotys, albeit at some point – he added.
Uncertainty „greater than during Covid”
Dr. Sławomir Dudek, the president and chief economist of the Institute of Public Finance, noted that „the tariffs will lead to a significant rise in prices”, yet a total halt of car exports from Europe to the US is not a feasible scenario.
– I believe that we will experience immediate effects, which account for 3 percent of exports. This ricochet effect indeed pertains to Germany. Germany has a very open economy, as does the entire EU. However, there are additional effects, which I refer to as side effects. They do not directly relate to goods exports. They involve fluctuations in stock markets, the ups and downs of financial markets, and considerable uncertainty – he elaborated.
– The professor indicated that the tariffs are at their highest in a century. However, American researchers also measure the Global Economic Policy Uncertainty Index, which indicates global economic uncertainty. This index is also at an all-time high. This uncertainty facing businesses and taxpayers is 2.5 times greater than, for instance, during the global financial crisis. It surpasses that experienced during Covid – emphasized Dudek.
The EU should negotiate
When questioned about how the European Union ought to react to Trump’s tariffs, Rosati asserted that it „must engage in negotiations.”
– A trade war is detrimental for all parties involved. It will result in losses for everyone. The EU should advocate for negotiations and urge the United States to retract these tariffs. Nevertheless, I believe that if such a resolution is not reached, the EU and major players, including China, will have no alternative. They will also need to increase (tariffs – ed.). Hence, the response must be proportionate – he clarified.
Furthermore, he added, smaller and medium-sized nations should „make efforts to visit Washington and request relief, specifically a waiver from the tariffs (from customs duties – ed.)”.
– In a traditional conflict, if we possess a firearm and shoot, we aim at the adversary. We don’t harm our own people. However, with tariffs, bullets are fired indiscriminately. Because if we impose tariffs, then products from the United States, which consumers rely on, will become more expensive. Consequently, European consumers will bear the cost – concluded Dr. Sławomir Dudek.
