New Delhi [India], August 9 : Countries should respond collectively to the latest tariffs imposed by the United States administration rather than pursuing separate bilateral deals, according to investment strategist Christopher Wood.
In the latest edition of Jefferies' 'GREED & fear' report, Wood warned that fragmented responses would weaken the multilateral trade system that has underpinned decades of global prosperity.
GREED & fear advises the "rest of the world to act collectively rather than each country seeking to do its own deal with the US."
Wood referred to the imposition of 50 per cent tariffs on goods from India and Brazil, alongside a 100 per cent tariff on imported semiconductor chips, as what he termed "xenophobic autarky".
According to the Jefferies report, exemptions were granted to certain companies, including TSMC, Samsung Electronics, and SK Hynix, because of their investment commitments in the United States.
Wood argued that these moves represent a sharp departure from the principles of the international trading framework that originated with the General Agreement on Tariffs and Trade (GATT) in 1947.
The renowned investment strategist also raised a legal question of whether former President Donald Trump possesses the authority to implement such tariff measures.
"The reality is that America has now gone rogue as regards the international trading system, which has its origins in the GATT established in 1947. Meanwhile, there remains the legal question of whether Donald Trump has the authority to make these moves," the report read.
The US administration has, in a way, adopted a flexible trade strategy by offering reduced tariffs to countries that pledge reciprocal benefits such as increased purchases of US goods, removal of trade barriers, or investment in American industries.
Several nations, including the UK, Indonesia, Japan, and the EU, successfully negotiated lower tariff rates than initially threatened.
US President Donald Trump had imposed reciprocal tariffs on dozens of countries with which the US has a trade deficit. Later, President Trump decided to pause the tariffs for 90 days after many countries initiated talks with the US administration for a trade deal. In these 90 days, starting April 9 and ending on July 9, President Trump imposed a 10 per cent baseline tariff on all countries.
The Trump administration had deferred imposing additional tariffs on several countries till August 1 and had indicated a further extension was unlikely.
Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to ensure fair trade.
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