Business responds to US reciprocal tariff plan
Following the announcement of the US reciprocal tariff plan, the International Chamber of Commerce has issued a statement describing the new measures as a shock to the global trading system that need not result in a systemic crisis.
Speaking on behalf of more than 45 million companies in over 170 countries, ICC Secretary General John W.H. Denton AO said:
“What we’ve seen today represents a watershed moment in American trade policy that poses severe downside risks to the global economy. To put this in historical context, effective US tariff rates now stand at a level not seen since the 1930s — and cover a significantly higher proportion of American GDP than the infamous Smoot-Hawley Act.
“This is, without doubt, a shock to the global trading system but it need not result in a systemic crisis. The US is an economic superpower but only accounts for 13% of global imports. How other nations respond to the new duties will ultimately determine the scale and depth of any economic fallout from “Liberation Day”. We continue to encourage governments to place an emphasis on negotiation and de-escalation to the greatest extent possible — tariff retaliation is a lose-lose game.
“We are immediately concerned by the potential impact of the severe tariffs imposed on a range of emerging economies — an approach which risks further damaging the development prospects of countries already facing worsening terms of trade.
“Businesses across our network will be seeking urgent clarification from the relevant US authorities on how new country-level tariffs will be applied in practice — including on how they interact with sector-specific duties and rules of origin requirements. Given the almost immediate entry into force of the new measures, there is a clear risk of costly supply chain disruptions and customs backlogs absent of express guidance being provided in a timely manner.
“From a broader perspective, it’s clear that the measures announced today present a fundamental challenge to the rules-based governance of trade. In addition to responding bilaterally to the US administration, we also need to see governments taking action to safeguard the multilateral system — and set the foundations for its eventual revitalisation.
“Predictability and certainty are fundamental to cross-border commerce. We fully appreciate the US administration’s desire to secure a level playing field for international trade but remain deeply sceptical that a tariff escalation of this scale can deliver on that goal — multilateral solutions will ultimately be needed to resolve longstanding inefficiencies and inequities in the global trading system.”
