Impact of Trump’s customs « all -encompassing »

Gylfi Zoëga, professor of economics at the University of Iceland, says that there will be uncertainty in international trade as long as Donald Trump is in power. The impact of tariffs has already affected the pension fund in Iceland.

Trump announced on Thursday of the tariffs that the country intends to impose on imported products from the other and these states. The first customs operations came into effect yesterday.

Customs duties on products from Iceland amount to 10%, so we escaped quite well compared to other nations. These include the European Union, which receives 20% of tariffs and Vietnam, which receives 46% of tariffs.

Impacts began to be felt immediately in stock markets around the world and now there is a great deal of uncertainty in international trade.

« All -encompassing »

« We see that the stock market is going down, so the pension funds are damaged, » says Gylfi in a conversation with mbl.is.

« So this is all -encompassing. »

Shares around the world have fallen, including in Iceland, where the ICEX ICEX -15 index (OMXI15) has fallen sharply in recent days.

« Ten percent of our duty has a complete impact, but it remains to be seen whether tariffs will be withdrawn at some point, » he says.

« Americans expect the money they had collected to send children to school is less valuable because the stock market goes down. The pension funds lose, so people find it difficult to retire, » he says further, adding:

« All this is then causing dissatisfaction at home. And we will see if this will not be that he will withdraw it. »

Equipped and done

It is really unclear whether the tariffs have come to be and have contradictory information was obtained from Washington officials, but even though the Trump government decides to pull land, there is uncertainty when this outdoor play.

« She alone can hurt a lot, » says Gylfi about the uncertainty. « Even if he pulls everything into the country, he has caused so much trouble. »

In the 20th century, a large proportion of US companies brought their production to China. Readers therefore undoubtedly recognize the famous « Made in China » label.

So China became more expensive for the country, MA because of a trade war that began with the United States in 2018, and then companies moved many of their production from China to Southeast Asia, including Vietnam.

But now Trump has imposed 46% of Vietnam’s products.

« And that means that companies that have invested in Vietnam think: may not be good to invest here, » says Gylfi, adding that even if Trump withdraws, investors can never be confident that they will never return.

« This predictor of international trade and regulations is gone while it is in power. »

Does him manage to resurrect American industries?

The Trump government’s hypothesis is that manufacturers will increasingly choose to produce products within the United States rather than import them because of customs duties.

Asked if there is anything in Trump’s ideas, Gylfi replies that it is uncertain whether the impact will be positive.

However, he notes that the transfer of US production to other countries has significantly affected the lowest classes in the United States. Lifetime of white Americans who do not have a university degree are at the same time shortening, as people are increasingly looking for alcohol and drug use. From that environment comes JD Vance President, as written in his biography, Hillbilly Elegy.

« So we can say that he has something to say, » says Gylfi, who, on the other hand, comments on the implementation of these Trump plans.

Double price for iPhone?

« It is uncertain whether this will have a positive effect in the end, » says Gylfi, mentioning that Apple’s iPhone, Apple’s smartphone, could rise significantly in price if the tech service passes the cost increase to the consumer.

Reuters Reported in the days that the price of the latest iPhone could amount to $ 2,300 (ISK 300,000), which was a 43% increase.

China’s government has now imposed mutual revenge on the United States that will take effect on Wednesday. Gylfi says, therefore, that export sectors in the United States are looking forward to lower demand and in this context mentions the export of agricultural products to China.

But as Gylfi mentions many times, there is a lot of uncertainty about the next steps. What Trump says or does next can have a significant impact on the global economy.