US President Donald Trump’s decision to delay implementing major tariff hikes on most trading partners may have offered some relief, but the extension is also prolonging global trade uncertainty, the UN warned Tuesday.
Days before the three-month pause on his “Liberation Day” tariffs was set to expire, the US president said Monday he would give trading partners an extra three weeks to hammer out deals to avoid paying sky-high levies for their exports to the world’s biggest economy.
Trump had unveiled sweeping tariffs on imports on April 2, including a baseline 10 per cent tariff on all countries, but following market turmoil, he quickly suspended tariffs above 10 per cent until July 9.
But prior to that deadline, he sent out letters to more than a dozen countries — including top trading partners Japan and South Korea — setting out what he had decided to charge if they did not reach agreements by a new August 1 target date.
Pamela Coke-Hamilton, director of the United Nations-backed International Trade Centre, told reporters in Geneva that the extension was not necessarily good news.
“While the reciprocal tariffs will no longer go into effect tomorrow as originally announced, but be (postponed) for another few weeks until first of August, this move actually extends the period of uncertainty,” she said.
That in turn risks “undermining long-term investment and business contracts and creating further uncertainty and instability”.
Predictability, she said, is the “one thing businesses need more than anything else”.
“If the sand keeps shifting, there’s no way that you can make firm decisions for your business.”