Will Trump's trade tariffs backfire?

AWANI

Trump’s tariff offensive is hitting nearly every major U.S. trading partner. He says it’s about protecting American industries. But could the U.S. end up paying the price? Joseph Cherian, Asia School of Business CEO, President & Dean,   warns the fallout could come sooner than expected.

Transcript

00:00The Trump administration is slapping higher tariffs on nearly every major trading partner,

00:06from China to the European Union.

00:08The White House says it's about protecting American industries.

00:12But could the US end up paying the price?

00:15Joseph Charan from Asia's School of Business says the economic fallout may hit sooner than expected.

00:21When you don't have that free trade and the glorious economic trading that is free of barriers,

00:33you need to form blocks, okay?

00:34You'll need to start trading their favorite partner and stuff like that.

00:38But coming back, is it temporary?

00:39I think it's temporary because the one who's going to get most affected by this is the one imposing the tariffs.

00:46As soon as they start hitting a recession, as soon as the price of goods go up in their territory,

00:52because of this tariffs, it's going to happen.

00:54Mark my words, it will happen.

00:56Can I get your sense of when would that happen?

00:58My sense is probably if it does happen, if we don't reverse course, first quarter of 2026,

01:04that's when inflation will start creeping up.

01:06You know, I listen to some pundits saying, oh, no inflation.

01:08So far the ground in America, mid-term level, is all okay, stable.

01:13No, they're living off inventories.

01:14Wait and see.

01:16The prices are bound to go up.

01:17There's no way it's not going to go up.

01:19So once inflation hits the heartlands of America, and once recession starts creeping in,

01:25they're going to ask, what is going on here?

01:27And that's when you'll see the pullback.

01:30Everyone's politically astute.

01:32It's going to be the politics driving them into the tariffs,

01:35and it's going to take them out of tariffs too.

01:37So what does this mean for businesses, especially here in Asia?

01:40How can they prepare for Trump's tariff escalation, even if it turns out to be temporary?

01:46You've got to play along with the blocks.

01:49That means if your country is part of a big regional block, take advantage of that.

01:53If the government is giving you financial enterprise solutions and financing,

01:59take advantage of that.

02:00Take whatever comes, because you'll need all the help you can get.

02:03So my view is take whatever you can.

02:05Go with the trade blocks.

02:08If you can, or even diversify.

02:10Come back to your question of diversification.

02:12If I'm a tire maker and I've got no operations in America, I do send tires to America,

02:19I'll get hit by the tariffs, correct?

02:21So what do I do?

02:23Do you start building a factory in America?

02:25Not necessary.

02:26If you want to, if it makes business sense, do it.

02:29Don't do it because it's a temporary measure, because you know it's going to go away.

02:33Those who don't have the flexibility, don't jump and say, I'm going to do factories here,

02:36I'm going to do factories.

02:37Think carefully about the long-term solution.

02:40What if I do it in America?

02:41How does it affect the other parts of the business?

02:44Can I use financial markets to hedge against those kind of situations?

02:49So you have to be a bit more flexible in your thinking as well,

02:52because you don't have to completely change the way you do your operations

02:56just because of some temporary blip in the economic trading system.

03:01But that's it.

03:02If you have operations in America, ramp it up.

03:05It'll help your case.

03:06But that's it.

03:09How does it affect the South America?

03:09Four of three of us.

03:10Can I use an architect on Gianna Ricciotto?

03:11Does it affect the South America?

03:11Yeah.

03:12How does it affect the South America?

03:13Of course.

03:13You.

03:14How do we do it in America?

03:15You 10% change it.

03:15I do.

03:16How do I feel?

03:16There I feel.

03:30Nations 1

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