The global economic stage in April 2025 is marked by significant uncertainty, largely driven by the US administration's aggressive stance on trade tariffs. As a 90-day pause offers a temporary lull in the storm, experts have been offering their insights into the potential ramifications and future trajectory of this unfolding situation. Drawing on recent interviews with leading economists, this article delves into the complexities of the current climate, highlighting key perspectives on negotiation tactics, business impacts, and the potential for both disruption and resolution.

The Art of the Deal? Understanding the Tariff Strategy

The imposition of baseline tariffs and subsequent higher reciprocal tariffs has sparked considerable debate. One economist described the rationale behind the tariffs as part of a negotiation strategy, stating, "Trump often asks for the moon when you know all he really wants is a piece of cheese". This perspective suggests that the initial extreme tariff proposals might be a strategic opening move, aimed at securing concessions from trading partners rather than a definitive long-term policy.

Unequal Burdens: The Impact on Businesses

While large corporations may possess the resources to navigate the complexities of new tariffs, smaller enterprises face a far more challenging landscape. Another expert highlighted this disparity, explaining, "if you are a large business, you'll figure out ways that way right to to bypass these things... But if you are a small business and you need to navigate this complexity, then I would say, You know, be careful". He further illustrated this point by mentioning Italian manufacturers potentially rerouting exports through San Marino to circumvent tariffs, noting that small to medium businesses will be affected the most as they lack the means to bypass these laws.

The Shadow of Uncertainty

The unpredictable nature of policy announcements and the back-and-forth approach to trade have created a climate of significant uncertainty for businesses worldwide. One interviewee emphasised this point, noting that "when you know, President Trump says, Well, I'm going to postpone this for 90 days. Will that be 90 days, will it be next Tuesday? And so this sort of the uncertainty level becomes extraordinarily high". This constant state of flux makes long-term planning and investment decisions incredibly difficult for businesses across all sectors.

A Glimmer of Hope: Currency Realignment

Amidst the concerns, some experts see potential avenues for mitigation. One analyst suggested a more systemic solution, proposing, "The ideal scenario would be a realignment of currencies... A 10% carry from everybody which would be manageable. That wouldn't really be that difficult". Such a coordinated international effort to adjust currency values could potentially offset some of the negative impacts of tariffs and restore a degree of balance to global trade.

Turning Back Time? The Aim of Tariffs

Delving deeper into the motivations behind the tariff policies, one expert suggests a potential desire to reshape the US economy. He argues, "Effectively. What tariffs are doing, you know, and they're pretty explicit on this is. Turn the clock backwards. shift back away from these trade patterns and go back to the earlier patterns. And you know, when manufacturing was bigger, when it employed more people". This perspective indicates that the tariffs might be driven by a broader vision of revitalising domestic manufacturing, even at the cost of established global trade relationships.

The Market's Verdict: Watching the Financial Barometer

Ultimately, the trajectory and impact of the trade conflict will be closely monitored by economic indicators. One interviewee highlights the critical role of financial markets in this assessment, asserting, "I think the markets are likely to be the answer... But if the bond markets start going and the banking system starts being at risk, then that that's something where even someone as impetuous and headstrong as trump, you know, really you're gonna pull back". This suggests that market stability, particularly in the bond market, could be a more influential factor than political negotiations.

Conclusion

The current 90-day pause in tariff escalations provides a window for negotiation and reassessment. However, the insights from these expert interviews reveal a complex landscape marked by strategic manoeuvring, unequal impacts, and significant uncertainty. While potential solutions like currency realignment are discussed, the ultimate direction of this trade conflict may hinge on a combination of political will and the signals emanating from the financial markets. Businesses, particularly smaller enterprises, must navigate this volatile environment with caution, while policymakers grapple with the potential long-term consequences of these bold trade interventions.