Global GDP will shrink by 2% in five years
At a campaign rally in Raleigh, North Carolina, on November 4, Trump said that unless the Mexican government curses illegal immigration across the border, once he is elected, he will impose a 25 percent tariff on all products imported from Mexico, which will be escalated to 100 percent at most.
Trump claimed the plan was a "100 percent success" and told his supporters that if the 25 percent tariffs didn't work, he would raise them to 50 percent, 75 percent, and even 100 percent if necessary.
Britain's National Institute of Economic and Social Research said on Nov. 6 that higher U.S. tariffs on goods imported from other countries would slow global economic growth, stoke inflation and push up interest rates once Trump wins the election.
In a quarterly report on the outlook for the UK and the global economy, the think tank said Trump's tariffs would shrink global GDP by 2% and trade volumes by 6% after five years. The size of the U.S. economy is expected to shrink 3 percent to 4 percent, in part because prices will rise and reduce consumer spending, while the Federal Reserve will raise its key interest rate to curb inflation, weakening investment spending.
Countries with close trade ties to the United States would also suffer significant losses, with Mexico's economy shrinking by 5 percent and Canada's by 3.5 percent, the report said. Countries such as the United Kingdom, Switzerland, Hungary, Poland, Singapore, South Korea, the Czech Republic and Turkey would also suffer big losses.
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