Muscat: Economic experts emphasized that establishing negotiated frameworks to preserve the trade balances of nations will lead to the stabilization of global markets following the new U.S. tariffs.
According to Oman News Agency, the new U.S. tariff package on imports has cast its shadow over the global economy, imposing rates of 34% on China, 20% on the European Union, and varying percentages on several other countries, while setting a minimum tariff of 10% on all U.S. imports.
Dr. Mohammed bin Humaid Al-Wardi, a member of the State Council, academic, and economic analyst, stated that the coming period will be filled with trade tensions and negotiations, which may impact global economic growth. He added that global markets will stabilize once major economies reach negotiated agreements that safeguard their trade balances.
He explained that the tariffs imposed by the U.S. will disrupt global trade, particularly supply chains, leading to weaker global economic growth-a concern echoed by the World Trade Organization (WTO), which warned of the risk of a trade war following the new U.S. tariffs. Projections indicate a potential 1% contraction in global merchandise trade volume by 2025.
It is expected that the U.S. tariffs will have additional effects, including fluctuations in the dollar and other currencies, shifts in U.S. interest rates, and rising inflation. This will introduce further uncertainty and instability into the global economy, further weakening international trade.
He noted that the U.S. aims to strengthen its negotiating position and secure greater gains in upcoming trade talks through these tariffs, effectively opening the door for negotiations. Countries will respond differently-some may adopt countermeasures, while others will seek to adapt and mitigate the economic impact.
For his part, Dr. Yousef bin Hamad Al-Balushi, an economic expert, pointed out that the primary objective of the U.S. behind its new tariff decision is to restructure the American economic cycle. This aims to enhance domestic investment, bolster the U.S. manufacturing sector, and boost exports, thereby creating numerous opportunities for the U.S. market.
He added that the impact of these new tariffs will be substantial on the global economy, leading to reduced worldwide demand-particularly from major economies such as China and the European Union. This will also have repercussions on fuel demand from these nations, resulting in lower oil prices. Additionally, the new U.S. tariffs and retaliatory measures by some countries will affect global financial markets, with international stock exchanges suffering losses due to investor panic.
He clarified that the Sultanate of Oman, as part of the global supply chain, will be affected by the U.S. tariffs-though to a relatively limited extent, particularly since U.S. imports of oil, gas, and refined products are exempt from these duties. However, the indirect impact will stem from lower oil prices due to reduced global demand and slower worldwide growth.
He noted that opportunities exist for Oman to enhance its appeal to foreign investment and position itself as a supplier to the U.S. market. The 10% tariff rate remains more favourable compared to the significantly higher rates imposed on many countries, such as China and Taiwan. Moving forward, Oman must actively promote its economy as an attractive investment destination.
For his part, economic expert Lo’ay Bataynah emphasized that the United States’ imposition of new tariffs is expected to trigger multiple global economic repercussions, most notably a contraction in international trade volume. The increased tariffs will likely slow the movement of goods, particularly between the U.S. and its major trade partners such as China and the European Union. This could weaken global supply chains, drive price hikes, fuel inflationary pressures, and raise import costs-ultimately leading to higher prices for consumers.
He stated that the new U.S. tariffs will reshape supply chains between countries and regions, as companies may redistribute production lines to circumvent the duties. This could generate opportunities for some developing nations while weakening the position of others that rely heavily on exports to the United States.
He outlined the expected global reactions to the U.S. tariffs, including retaliatory measures by other countries-potentially sparking a full-scale trade war harmful to all parties. Another scenario involves negotiations and revisions of trade agreements, particularly free trade deals with the U.S., as some nations may seek reduced tariffs or exemptions through diplomacy.
He also noted that among the anticipated responses to the tariffs’ impact is government support for affected industries, either through stimulus packages or domestic protectionist policies. Many countries may strengthen regional ties and intra-bloc trade in an effort to reduce reliance on the U.S. market.
China announced it will impose 34% tariffs on all imported U.S. products in response to America’s equivalent tariffs on Chinese goods. Meanwhile, several European Union countries are considering retaliatory measures against the U.S. tariffs.
Oil prices continued their decline today, dropping by over 3% following Friday’s 7% loss, driven by fears of an economic recession that could reduce demand for crude oil. Meanwhile, several global stock market indices also saw losses at varying rates.