President Donald Trump’s efforts to broker a peace deal between Russia and Ukraine could end up backfiring on his plans to reorder global trade policy.
That’s according to Matt Gertken, the chief geopolitical strategist at BCA Research. Gertken thinks that Trump’s efforts to officiate a ceasefire between the warring countries could jeopardize the president’s trade negotiations.
That’s mainly because penalties imposed on Russia could end up jeopardizing the US-China trade agreement, one of the biggest trade wins the president has achieved so far, Gertken said.
The US and China first reached a framework trade agreement in May, after both sides said they would significantly lower the tariff rate on goods from the other country for a 90-day period while talks continue.
That 90-day period is set to end on August 12, a date that follows Trump’s August 7 deadline for slapping more sanctions or tariffs on Russia unless it agrees to a ceasefire.
“Hence from August 7, Trump could hit the world with a new and different tariff shock,” Gertken wrote in a note to clients on Wednesday. “Turkey, India, Brazil, and China would
suffer the largest shock,” he added, pointing to each country’s extensive trade with Russia.
International Monetary Fund/BCA Research
“The Trump administration is also reluctant to cause a lasting and irreversible shock to the global economy and ruin its best laid plans merely to achieve a ceasefire in Ukraine” Gertken added.
However, he conceded that, at least through August, investors should be ready for more short-term tariff pain if Russia resists Trump’s calls to end hostilities.
Not budging on his deadline
Jim Watson/AFP via Getty Images; Contributor via Getty Images
Trump has repeatedly pressured Russia to negotiate a ceasefire or enter peace talks with Ukraine this year. In recent months, he’s hounded Putin through posts on Truth Social and has also threatened additional tariffs on some of Russia’s top trading partners.
In July, Trump threatened fresh tariffs on countries aligning themselves with BRICS, the bloc of nations wherein Russia is a core member.
This week, he followed through by slapping a 25% tariff on goods imported to the US from India, another core BRICS member.
“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!,” Trump wrote of the India tariff in a post on Wednesday.
Reuters
Trade officials from the US and China just concluded their latest round of talks in Sweden. Negotiators said that the two nations could extend the 90-day pause on higher tariffs, if Trump gives the green light.
In another post on Truth Social Wednesday morning, Trump said he had no intention of extending the separate August 1st deadline for Liberation Day tariffs.
“IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!,” he said of the date.