According to currency analysts at Bank of America, if US President Donald Trump moves forward with wiped tariffs, the US dollar might not be sustainable.
In a recent report, Athanasios Vamvakidis and Claudio Piron pointed out that target tariffs on certain products are already expected in the market, but broader trade restrictions will be “negative surprises.” They warn that new tariffs could lead to more uncertainty, especially given concerns about the potential slowdown in the US.
“We believe the risks are balanced ahead of next week’s deadline. The market is already hoping for tariffs on certain products. Comprehensive tariffs are a negative surprise. If comprehensive tariffs are in place, the dollar will continue to be strengthened, and the market is still worried about a slowdown in the US economy. They also said that logistics issues could delay the implementation of new tariffs, leaving room for potential negotiations.
Trump’s tariff strategy has sparked widespread concern among economic and business groups, particularly in Japan. On March 26, Trump signed a memorandum at the White House, imposing a 25% tariff on imported cars, and came into effect on April 2.
Hideo Kumano, chief economist at the Dai-ichi Life Research Institute, said that such protectionist policies are likely to generate economic benefits and could instead pose risks to the wider global economy. “There will be no positive impact on US tariff policy and will pose risks to the global economy,” Kumano said.
*This is not investment advice.
