With Donald Trump’s potential return to the White House, significant disruptions loom for global trade and economic stability. Mark Dempsey, Senior Director of Consulting at GlobalData, warns that a Trump 2.0 presidency could trigger profound changes, including sweeping tariffs and a bolstered tech rivalry with China.
Market participants, particularly those in the beverage industry, are concerned that Trump may once again use import tariffs as a tool for trade disputes. During his first term, he imposed retaliatory tariffs on Scotch whisky imports between October 2019 and March 2021, leading to an estimated GBP 600 million loss in exports, according to the Scotch Whisky Association (inside.beer, 3.10.2019). These tariffs are scheduled for review in June 2026.
Trump’s proposed tariff measures could include a 10-20% baseline on all U.S. imports and a staggering 60% or higher tariff specifically targeting Chinese goods. These policies are expected to raise costs for U.S. importers and drive up consumer prices, contradicting Trump’s pledge to bolster American manufacturing. Despite Trump’s claims, tariffs burden the importing companies, not the exporting nations, placing pressure on U.S. businesses and consumers alike.
Countries around the world are likely to respond with their own tariffs, which could spark a global trade conflict. The economic fallout for China could be severe, potentially cutting two percentage points from its GDP growth if U.S. tariffs extend across all Chinese exports. To mitigate the impact, China may need to boost domestic demand through significant economic stimulus.
A robust U.S. dollar, driven by market responses to Trump’s policies, could exacerbate the economic challenges, making U.S. exports less competitive. This strong dollar trend could undermine Trump’s efforts to revive domestic manufacturing and lead to currency adjustments by major economies to offset higher export costs.
An ongoing tech rivalry will most likely shape U.S.-China relations, centered on control over advanced microchips, data centers, energy resources, and essential minerals. The competition may influence economic strategies, with Trump’s policies potentially focusing on advancing U.S. technology faster or disrupting Chinese progress.
Trump’s agenda may include boosting U.S. oil and gas output to lower energy costs. While this move might offset some inflationary pressures at home, it could lead to deflationary effects in global markets, easing supply chain costs for consumer industries.
Dempsey points out that although Trump’s campaign rhetoric is tough, the practical approach could see a return to his previous method of leveraging tariff threats for trade concessions. This could result in a more tempered “trade war” than initially anticipated, with changes emerging incrementally over time.
