| Wednesday’s announcement of the higher tariffs the US will put in place on almost every nation on Earth has sent a shockwave through the global economy. Enda Curran is here today to explain all the warnings coming from economists. If this email was forwarded to you, click here to sign up. President Donald Trump called it “Liberation Day.” Others have countered with “Obliteration Day.” No matter your position in the trade debate, the Rose Garden announcement on Wednesday that the US would impose its highest tariffs in a century has shocked businesses, households and investors, and firmly established that we’re in a period of deep uncertainty. Roughly $1.7 trillion was erased from the S&P 500 Index at the start of trading on Thursday. Few countries have been spared, including the unlikely target of Heard Island and McDonald Islands, an uninhabited archipelago near Antarctica that serves as a breeding habitat for penguins.  TVs at the New York Stock Exchange on Thursday showed sharp declines. Photographer: Michael Nagle/Bloomberg If Trump is right, foreign manufacturers will flock to the US, offering jobs and investment and driving the economy to higher levels of growth. If his critics are right, the US economy is about to veer from being the envy of the world to becoming its biggest source of disruption, eroding Americans’ soft power and handing the advantage to China and other trading rivals. Related: Tracking Every Trump Tariff and Its Economic Effect The breadth and scale of the tariffs has shattered economists’ assumptions about the kind of trade policy Trump would actually implement and heightens the risk of both a US and global recession. If implemented over the next week as announced, average US tariffs will rise to a higher level than those set by the Smoot-Hawley Tariff Act of 1930, a policy move later blamed for stoking the global Great Depression. The warnings from economists go like this: The new duties on goods imported into the US will push prices higher and, by extension, hurt demand among consumers. That will be combined with the likelihood of tit-for-tat retaliations by trading partners that will weigh on business sentiment and tip the world economy into a spiral. Laptop computers, denim jeans or a new (or even used) car will all cost much more next week. Bruce Kasman, JPMorgan’s chief economist and head of global economic research, said in an email that, if the tariffs go ahead as announced, they’ll likely push the US and the world economy into recession this year. Neil Dutta, head of US economic research at Renaissance Macro Research, was the one who dubbed Wednesday “Obliteration Day.” There’s even been debate about how the Trump administration calculated the tariff levels. The president had promised to tally duties based on the tariffs and nontariff barriers—such as value-added taxes, intellectual property theft and exchange rates—imposed by each trading partner. The argument being that the US allows foreign goods to pour in, relatively unhindered, while big rivals such as China make it much harder for American goods to be sold there. But the administration’s calculations have drawn scrutiny, with critics saying they don’t factor in reciprocal barriers and instead are a crude calculation based on existing trade balances, sticking many countries with very high new tariff rates. For now, analysts detect little hint of an offer to quickly negotiate away the higher duties. And even then, that would take time, given the protracted, technical nature of such talks, according to Sarah Bianchi, chief strategist of international political affairs at Evercore IS and a former deputy trade representative. “Folks should prepare to be patient,” she told Bloomberg Television. “Tariffs are easier to put on than they are to take off. We are not going back to where we were.” See the latest updates on the fallout from Trump’s tariff announcement. Trade wars, tariff threats and logistics shocks are upending businesses and spreading volatility. Understand the new order of global commerce with the Supply Lines newsletter. | 
