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illuminem summarises for you the essential news of the day. Read the full piece on The Economist or enjoy below:
🗞️ Driving the news: Former U.S. President Donald Trump has unveiled a controversial new tariff policy, using an unusual formula based on single-year bilateral trade deficits
• This has produced surreal outcomes, including a 25.8% tariff on tiny Saint Pierre and Miquelon, a 17.5% tariff on the Maldives, and duties of 16.1% on Cambodia, 10.3% on Vietnam, and 3.1% on Switzerland
• The policy has drawn mockery for its arbitrary design and disregard for economic norms
🔭 The context: Trade imbalances have long been a target of Trump’s economic nationalism
• During his previous presidency, he imposed sweeping tariffs on China and others under a protectionist agenda
• This latest formula—tying tariffs to internet domain-linked countries and using narrow trade data—marks a return to erratic, unilateral trade measures outside the norms of international economic governance
🌍 Why it matters for the planet: While the policy itself doesn't aim at environmental outcomes, it highlights a deeper tension: how erratic trade measures can destabilize global cooperation—including in climate-critical sectors like clean tech and rare earths
• Such unpredictability can deter green investment and fragment supply chains needed for the energy transition
• Moreover, punitive tariffs on low-volume partners risk alienating small nations engaged in collaborative marine or polar conservation
⏭️ What's next: Affected countries may pursue legal redress through the World Trade Organization or bilateral diplomacy
• International companies with exposure to these countries, especially in apparel, electronics, and tourism sectors, may reassess their strategies
• Domestic and global trade advocates are expected to challenge the policy’s legitimacy, with U.S. institutions possibly facing renewed debates over executive trade authority
💬 One quote: “Saint Pierre and Miquelon? Most Americans couldn’t find it on a map—and now it faces one of the highest tariffs in the world,” said a former USTR official
📈 One stat: The Maldives exported just $3 million worth of goods to the U.S. last year—yet now faces a 17.5% tariff under Trump’s plan
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