Trump’s growing chance to win US presidential race fuels ‘trade war’ concerns

Trump plans to impose 60% tariff on Chinese goods, 10% on int’l imports, signaling tougher protectionist trade policies in his 2nd term

By Dilara Zengin

WASHINGTON (AA) – Former US President Donald Trump’s growing chances to win the presidential race in November after the assassination attempt on him have fueled concerns over a trade war in the global markets.

As the Nov. 5 election day nears, statements of the presidential candidates have significantly impacted the markets.

Trump followed protectionist trade policies during his first presidential term, and his recent statements signal that these policies may become even more severe after his potential re-election.


- Trump plans to impose 60% tariff on Chinese imports

Donald Trump suggested that tariffs, which he deems as a source of revenue, will stimulate production in the US, reducing dependency on foreign goods, all the while decreasing the country’s foreign trade deficit.

Trump imposed tariffs on Chinese imports worth $200 billion in 2018, and he plans to impose a 60% tariff on Chinese imports and a 10% tariffs on goods imported from other countries.

The former president’s re-election may increase trade tensions with the EU and China.


- Trump accuses Taiwan of taking ‘100%’ of US chip business

Donald Trump said in a Bloomberg Businessweek interview that Taiwan took “100% of chip business” in the US, for which Taiwan “should pay the US for defense,” pressuring chipmaker shares.

Experts say that the former president may also consider taking trade measures against Vietnam in his potential second term in office.

Although Trump has yet to threaten Mexico with broad tariffs, like he did back in 2016 in his first presidential campaign, the negotiations during the review of the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA), could be quite heated in 2026 if Trump is re-elected.


- Inflation concerns rise over Trump’s policies

Donald Trump’s protectionist trade policies will increase consumer prices, economists say.

Trump’s tax and tariff plans are estimated to cost an additional $1,700 per year for a middle-income family, according to an analysis by the Peterson Institute for International Economics (PIIE).

In a letter addressed to the former president, 16 Nobel laureate economists, led by Joseph Stiglitz, stated their deep concerns over the risks to the US economy from a second Trump administration in June.


- Trump’s statements on chip business fuel selling pressure on chipmaker shares

As a positive trend starts for Donald Trump’s probability to win the presidential race in the money markets, equity markets followed a mixed course mid-week amid concerns over escalating trade and geopolitical tensions between the US and China.

The Biden administration is considering using the most severe trade restrictions if firms, such as the Japanese chipmaker Tokyo Electron and the Dutch semiconductor company ASML Holding, continue providing China with access to advanced chip technologies, according to a report by Bloomberg released on Wednesday.

This news caused a sharp sell-off in chipmaker shares, as well as the shares of artificial intelligence (AI) firms.

Trump’s statements on Taiwan, accusing the country of having “100% of US chip business,” coupled with the Biden administration’s possible restrictions, led to the shares of companies in chipmaking and AI to lose $500 billion in one day.

Meanwhile, the shares of clean energy firms, European carmakers, and Chinese companies trading in the US declined at the beginning of the week, as these could become a target of Trump’s policies.

At the same time, crypto company shares increased with expectations that the second Trump administration may be kind to cryptocurrencies.

Some bond investors are concerned that Trump’s policies will cause high inflation and fiscal deficits, analysts say.

Analysts noted that many investors believe that monetary policy and corporate profitability will overshadow politics, as many things can change until the election day.

*Writing by Emir Yildirim


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