At 5:01 am GMT on Tuesday, February 4, tariffs announced by Donald Trump against the United States's main trading partners should have gone into effect according to the executive orders signed on Saturday. These tariffs imposed a 25% penalty on imports from Mexico and Canada (excluding energy) and 10% on those originating in China.

The European Union, for which no decision had yet been made, stood ready to act as Trump reiterated on Friday, January 31, that he "absolutely" intended to target it. The EU vowed to respond "firmly," as did the Mexican and Canadian governments.

They got their way, at least temporarily. Twelve hours before the deadline, the US withdrew its threat on goods from Mexico, then from Canada... for one month. On the stock market, shares of automakers and automotive suppliers went through a roller-coaster ride. Some relief followed, but discussions are still ongoing.

Whatever their outcome, the global economy will not emerge unscathed. "Remember the trade war of 2018-2019," wrote John Plassard, an analyst for Geneva-based Mirabaud Bank. "Eurozone GDP growth was strangled, reduced by 0.9 points not because of direct costs but because fear gripped the markets. Trade uncertainty acts like a slow poison, seeping into boardrooms and freezing investment decisions." It's hard to be completely serene, particularly as the threat of tariffs has exposed the vulnerabilities of the automotive sector.

You have 65.66% of this article left to read. The rest is for subscribers only.