America's Tariff Fortress: The Persistence of Trade Policy and Geopolitical Risk

As the United States signals the potential for new tariffs under Sections 301 and 232 upon the expiration of the 15% tariff, anxieties surrounding the global trade order are escalating. This transcends a mere shift in trade policy, potentially accelerating geopolitical tensions and supply chain restructuring.

The Shift in US Tariff Policy: Background and Outlook

According to a recent report by Maekyung, the United States is signaling the potential to impose new tariffs under Sections 301 and 232 as the 15% tariff expires. This serves as a stark example of the continuation of the protectionist stance that began during the Trump administration. Section 301 is used as a retaliatory measure against intellectual property rights infringements by the US, while Section 232 regulates imports that threaten national security.

Potential Impacts of Tariff Imposition

The imposition of new tariffs could have far-reaching effects on global trade. In particular, the possibility of escalating trade conflicts with China is high, which could disrupt global supply chains and exacerbate inflation. It could also negatively impact relationships with US allies. For example, trade disputes could arise with major trading partners such as the European Union (EU) or Japan.

Increased Geopolitical Risk

US tariff policy acts as a factor increasing geopolitical risk, going beyond simple economic issues. Tariffs can deepen distrust between countries and lead to the spread of protectionism. This increases uncertainty in the global economy and dampens investment sentiment. In particular, US tariff policy can act as an even more unstable factor in a situation where geopolitical conflicts such as the Russia-Ukraine war are ongoing.

Reconsidering Investment Strategies

In this situation, investors need to reconsider their investment strategies. Changes in the global trade environment can negatively impact investments in certain industries or countries. Therefore, it is important to reduce risk through diversification and make investment decisions from a long-term perspective. Preparation for exchange rate fluctuations is also necessary. Changes in US tariff policy could lead to a stronger dollar, which could lead to a weaker emerging market currency.