00:00Marco Forgioni is the Director General of the Chartered Institute of Export and International Trade.
00:05Joining us now, hi Marco, do you have a handle on what impact these tariffs are going to have, a big picture if you will?
00:13What we're seeing is a full spectrum pressure being applied to very deliberately unpick the global multilateral system.
00:23Now, there are nations and blocs, the UK and the EU particularly, who've secured arrangements and deals with the US.
00:30So they're probably feeling pretty confident now that they've got an advantageous relationship with the US.
00:37But for all the other nations, it's clear that this full spectrum pressure is being applied to drive them to the table,
00:44to secure the deals that President Trump wants done, to rebalance trade, as he sees it, between the US and those nations.
00:52But more importantly, to exert monumental geopolitical pressure to force a much bigger impact beyond trade,
01:01which is to drive investment into the US. And we're already seeing that having an impact.
01:07Do you think this is the beginning of the end of multilateralism?
01:11I think very much that that is gone. And the evidence of that was particularly evident last week when the EU did their deal with the with the US.
01:21I think that the world that existed, you know, 18 months ago has gone.
01:26We are in a new era now, not just of global trade, but actually of the multilateral system,
01:32the way in which the world operates in a geopolitical level has all been changed because of what President Trump has brought to bear,
01:39both with politics and the economy.
01:42And you can see nations now trying to jostle, to try and try and understand what the future looks like and at the same time secure a better arrangement with the US.
01:52Donald Trump says the US is going to rake in billions of dollars on tariffs. Is he right?
01:58Well, the estimates are that by the end of this year, the tariffs will have generated somewhere in the region of 200 billion dollars for the US.
02:08But you have to bear in mind, it's not just about the revenue that's being generated by the tariffs.
02:13It's the impact of the force to encourage businesses to invest in the US.
02:19And we've seen a lot of announcements over the last four months of major multinational businesses all committing to invest into the US,
02:26the EU making a commitment that it will itself invest into the US and committing to buy both defense and energy from the US.
02:34So this America first program is having an impact. And the the in addition to the tariff announcements last night,
02:44President Trump wrote to 17 of the largest pharma companies, multinational pharma companies to exert real pressure on them around the price of medicines in the US.
02:55And already we're hearing that companies like AstraZeneca are really looking at possibly listing in the US and possibly moving their manufacturing to the US.
03:04So we can see the force that's being exerted is having an impact.
03:09Prices, though, in the United States, we're seeing data out. Furniture is up for the first time in three years.
03:17Is the American consumer going to be affected negatively?
03:23Well, Jerome Powell, in his announcements this week, was clear that the the impact of the tariffs is inflationary in the US.
03:31So we are seeing that inflationary pressure. And President Trump, despite putting putting exerting, again,
03:38a determination to get the Fed to cut interest rates in the US, the Fed has made the decision to hold them because of that inflationary pressure.
03:46We're going through a period now of really quite intense uncertainty and instability.
03:51President Trump clearly believes that the route that he's set upon will have a medium term and long term benefit,
03:59both with rehoming manufacturing, growing jobs and growing salaries and wages in the US.
04:06But, you know, it's not guaranteed that that's going to be the impact for the rest of the world.
04:11The instability and the uncertainty is definitely having inflationary pressures and causing trade diversions,
04:16which are impacting production, domestic production in places like the UK and the EU,
04:21which may in turn have to take retaliatory action just to protect their domestic markets.
04:26Always great to hear your insights. Thank you so much, Marco Forgioni,
04:29Director General of the Chartered Institute of Export and International Trade.
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