Recent economic data from several countries indicate that U.S. trade policies under former President Trump have contributed to global economic strain. The imposition of high tariffs disrupted international trade flows, particularly affecting nations reliant on exports to the American market. n nJapan’s economy contracted by nearly 2% on an annualized basis in the third quarter, marking the first decline in over a year. Switzerland’s GDP also dipped by 0.5%, its first quarterly drop since 2023. A key factor in both cases was reduced export demand, as American tariffs made their goods less competitive. n nIn Japan, auto shipments declined sharply despite a mid-year trade agreement that lowered tariffs from 25% to 15%. Earlier surges in exports had occurred as companies rushed to deliver vehicles before the levies took full effect. n nSwiss exports of luxury items such as watches and chocolate suffered significantly after Trump introduced a near-40% tariff in August. With limited domestic stimulus options, the country lacked a cushion to absorb the external shock. n nChina’s economic outlook has also worsened. Factory output grew by about 5% year-over-year last month, the slowest pace in 2024. Investment in construction and machinery fell by 1.7% over the first ten months of the year, an unprecedented contraction. n nExports dropped unexpectedly by more than 1% in October, with shipments to the U.S. down 25% compared to the previous year. Weak demand from the European Union and Southeast Asia further limited alternative markets. n n”Chinese exports cannot grow indefinitely, not just because of U.S. tariffs but due to broader global economic deceleration,” said Alicia Garcia-Herrero, an economist at Natixis, speaking to Reuters. n nAlthough recent trade deals have reduced some tariffs, they remain well above pre-2017 levels. This suggests ongoing pressure on global supply chains. Past trade truces with China have collapsed, raising doubts about the durability of current agreements. n nOne example is the unfulfilled commitment to purchase 12 million metric tons of U.S. soybeans this year. “We’ve not seen any of that,” said Todd Main of the Illinois Soybean Association, highlighting the lack of follow-through. n nThe situation underscores how unilateral trade measures can ripple across economies, especially when partner nations lack offsetting growth drivers like a tech investment boom. n— news from Axios n
— News Original —nTrump’s tariffs hit the global economy nThere is new evidence of global pain stemming from President Trump ‘s trade policy, which single-handedly scrambled the world economy. n nWhy it matters: From China to Switzerland, the economic readjustment to double-digit tariffs has been bumpy. Even with trade deals, the levies imposed on their goods are still well above pre-Trump norms. n nUnlike the U.S., most countries do not have an AI investment boom picking up the slack. n nDriving the news: Japan ‘s economy shrank by almost 2% on an annualized basis in the third quarter, the first time activity contracted in more than a year. Switzerland ‘s GDP in the same period fell by 0.5%, the first quarterly drop since 2023. n nA slowdown in exports to the critical U.S. market was a key drag on the respective economies, as tariffs weighed on demand for their goods. n nIn Japan, shipments of autos plunged after a pickup earlier in the year as many sought to get ahead of tariffs — even as a U.S.-Japan trade deal in July slashed tariffs from 25% to 15%. n nSwitzerland ‘s U.S. exports of watches, chocolate and more plummeted as the near-40% tariff rate imposed by Trump in August took effect. n nThe big picture: That data, released overnight, follows a string of bleak economic readings in China that show the economy is on weaker footing than previously known — even as it ramped up trade tensions with the U.S. n nIn recent years, strong exports and robust investment have helped make up for slumping demand from Chinese consumers. Now both sides of its economy are struggling in tandem, a recipe for a deeper slowdown. n nFactory output expanded by roughly 5% last month compared to the same period a year ago, though that is the slowest pace of growth so far this year. n nSpending on buildings and equipment contracted by 1.7% in the 10 months ending in October — an unprecedented decline. n nBetween the lines: Exports unexpectedly crashed in October, shrinking more than 1% — the worst since February, when Trump announced an inaugural tariff hike on Chinese goods. n nShipments to the U.S. fell 25% compared to a year earlier, but the data indicated the nation is struggling to find other sources of demand for its goods. Reuters reported there were lackluster exports to the EU and other Southeast Asian nations last month, too. n”Chinese exports cannot continue to grow forever, and it ‘s not only because of the U.S. but because the global economy is slowing,” Natixis economist Alicia Garcia-Herrero told Reuters. n nWhat to watch: Recent trade agreements, including with China and Switzerland, have cut tariffs, though they remain notably higher than before Trump took office — a sign that the levies might continue to weigh on the global economy, even if not as much as they did this year. n nChina trade truces have fallen apart before and there is a chance that might happen again, even as a struggling economy would seem to give the U.S. an upper hand in negotiations. n nFor example: China appears to already be slow-walking its purchases of U.S. soybeans, a key aspect of the nations ‘ trade agreement. n nChina promised to buy 12 million metric tons of soybeans this year, “but we ‘ve not seen any of that,” Todd Main, market development director of the Illinois Soybean Association, told our Axios Chicago colleague Monica Eng.