LIVE MARKETS-Tariff whiplash: Standard Chartered flags growth risks as Trump resets trade rules

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TARIFF WHIPLASH: STANDARD CHARTERED FLAGS GROWTH RISKS AS TRUMP RESETS TRADE RULES

On August 1, U.S. President Donald Trump reignited trade tensions by announcing revised reciprocal tariff rates, ending a four-month pause that had allowed trading partners time to negotiate exemptions.

Trump imposed steep tariffs on exports from several major economies including Canada, Brazil, India, and Taiwan, underscoring his intent to reshape the global economic order.

According to Standard Chartered, the average effective U.S. tariff rate now stands at approximately 17%, a drop from the April peak of 25%, but still significantly higher than the 4.8% estimated before this latest round of announcements and well above the 10% base rate anticipated by markets.

This shift is already influencing global economic dynamics. Standard Chartered estimates that the tariffs imposed so far will shave 0.2 percentage points off global growth over the next year, primarily due to direct and indirect impacts on exports.

However, the true cost could be higher, as these figures don't account for the broader consequences, such as diminished business confidence, delayed investments, and heightened uncertainty.

"We expect global growth to be weaker in H2 than in H1 as declining trade activity starts to bite," Standard Chartered said in a note led by Madhur Jha, global economist and head of thematic research.

Asian economies remain especially vulnerable.

While strong first-half growth and policy support have helped soften the impact, global growth for 2025 has been slightly downgraded to 3.1% from 3.2%. Major partners like the EU, Japan, and South Korea have secured lower tariffs, but ASEAN nations still face steep duties, according to the brokerage.

The added risk of sector-specific tariffs, particularly in semiconductors and pharmaceuticals, could affect up to 20% of U.S. imports, posing sharp challenges for export-driven economies like Singapore and Vietnam.

U.S. President Donald Trump said Friday he will impose tariffs on steel imports next week, followed by semiconductor chips the week after.

(Akriti Shah)

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