24 Feb 2025
Trade Tensions
Conditional globalization is reshaping trade as countries impose tariffs to protect domestic industries. This fragmentation increases costs, disrupts supply chains, and strains international relations, posing risks and opportunities for businesses and policymakers.
This report does not constitute a rating action, neither was it discussed by a rating committee.
US Tariffs Plans: FAQs
Dive into the comprehensive guide on US tariff plans and their far-reaching implications. Download now to learn about:
- Basics of tariffs
- Economic implications
- Country-specific impacts
- What it means for companies
Power Plays in 2025: Setting adaptive strategies
Governments worldwide are entering 2025 amidst shared challenges, including economic rivalries, climate disruptions, and political transitions. These issues are straining international relations as national interests overshadow collective goals. The rise in protectionism and industrial policies, especially between major powers like the US and China, is reshaping global trade dynamics. Simultaneously, technological competition is intensifying as nations strive to advance in AI and defense innovations.
How US tariffs could shake up Mexico's economic landscape
The US accounts for over 80% of Mexican exports, primarily in manufactured goods. How would a 25% tariff, to contain migration or reduce drug trafficking, shake up Mexico’s economic landscape? And what pinch would the US feel were Mexico to respond with 10% tariffs on a limited range of goods, primarily targeting metals and select food items?
Supply chain strategies to mitigate tariffs
A renewed round of import tariffs to the US will require companies to brush off their playbooks for dealing with tariffs, and there are plenty of routes for doing so.
As more details of tariffs in the US become clear in 2025, firms will increasingly need to pick one or more of these strategies. None of these fixes for tariffs are without cost, leaving firms in the unenviable position of needing to return to the financial responses of raising prices, cutting costs elsewhere or accepting lower profitability.
Navigating Global Trade Challenges
Conditional globalization is redefining the global trade landscape, with countries using tariffs and trade barriers to protect domestic industries. This fragmented environment leads to higher costs and reduced integration, impacting supply chains and international relations.
US sanctions approach during Trump's second term
During the 2024 election campaign, President Donald Trump suggested that he would implement a major change in the US’ policy approach away from its prior widespread use of international sanctions. Precedent from Donald Trump’s first presidency indicates his likely policy during his second term, suggesting widespread and extensive listing and delisting of sanctions in the four-year outlook.