Christos Kalogeris: If the announced tariffs are implemented and maintained, they could materially raise growth risks

While US President Dnald Trump has announced a 90-day pause–except for China– on the introduction of previously announced tariffs, experts have shared their view the potential impact these tariffs will have when, and if, they are introduced.

Asked to share his opinion, Christos Kalogeris, General Manager, The Cyprus Investment & Securities Corporation Ltd. (CISCO), told CBN, “This is one of the biggest changes in US economic policy in a generation, potentially raising the effective tariff rate on imports to the highest level seen in at least 100 years.”

“President Donald Trump announced on 2 April, 2025, a significant increase in tariffs on all imports into the United States,” he went on to explain, “The President utilised his authority under the so called IEEPA (International Emergency Economic Powers Act) to introduce a baseline tariff of 10% starting on 5 April 2025 on imports from all countries and higher 'reciprocal' tariffs on several key trading partners with whom the US has large trade deficits with effect from 9 April, plus a confirmed 25% tariff previously announced on car imports”

As Kalogeris noted, “Some goods will be exempted, including copper, pharmaceuticals, semiconductors, lumber articles, and energy, as well as certain minerals not available in the US. These goods will be subject to tariffs at already determined rates or at rates to be determined in the future. Tariffs are hitting particularly hard ASEAN countries including China in attempt to rebalance the global trade system. LATAM and Europe were relatively less impacted, while Canada and Mexico have not been addressed since the USMCA (United States-Mexico-Canada Agreement) discussion is likely progressing in tandem.”

“This is one of the biggest changes in US economic policy in a generation, potentially raising the effective tariff rate on imports to the highest level seen in at least 100 years. If the announced tariffs are implemented and maintained, they could materially raise growth risks in the US and globally over the coming year, while lifting inflation and potentially complicating the response of central banks. The effects will depend on various factors, including the duration of proposed tariffs, retaliatory actions, and fiscal and monetary policy support offsets,” the expert continued.

Kalogeris went on to note, “Markets since the announcement have been digesting the impact, adopting as expected, a risk-off, defensive tone, with equities falling sharply, bonds and gold rallying, and the US dollar depreciating against most major currencies. More specifically S&P 500 and Nasdaq fell, year to date, -13.73% and 19.28%, respectively, and STOXX 600 is down 7.33%. Bond yields dropped, with the US the ten-year yield at 3.945% while German ten-year yield at 2.452%.”

“With such a historic change, it’s only natural for the market to correct and it’s tempting to cut exposures and shift to cash. However, there are reasons not to panic and is important, especially for long-term investors to remember that the policy-induced nature of this selloff means it is more susceptible to a rapid rebound than, a sell-off driven by purely economic factor,” the expert concluded.

(These comments were prepared on April 8th before the Trump announcement for a 90-day hold)