There is no need to extend the July 9 deadline on tariffs. Donald Trump is convinced of this: the US administration "is sending letters" to the approximately 200 countries affected by the measures.

«We have made an agreement on tariffs with China and Great Britain, we are working on agreements with all the others».

The rush to protectionism triggered by Donald Trump has already caused damage before the tariffs actually come into force. But the real impact on economic growth will be something else entirely, because it will combine with a mix of pre-existing "vulnerabilities" that already by themselves create risks for financial stability and debt sustainability.

The alarm was raised by the Annual Economic Report of the Bank for International Settlements (BIS), Basile's institution that serves as a link and coordination between the world's central banks. With a document that arrives just as, on the one hand, a sort of agreement between the US and China seems to be taking shape, on the other, there is a rift between Washington and Canada over the taxation of Big Tech, in what sounds like a warning to the European Union in the final stages of negotiations with Trump.

The global economy - warns the BRI - "will feel the impact of high uncertainty even before the full effect of the duties: businesses - as can also be seen from Istat data for Italy - are delaying investments and families are increasing savings to protect themselves. But the slowdown in growth has yet to be seen in the data: what we can see now is that "high uncertainty and declining consumer and business confidence clearly signal an impending deterioration in economic activity", with growth expected to worsen significantly "for several countries".

A threat that, with two theaters of war on the margins of Europe, in the exit from the pandemic and the inflationary shock from energy prices, does not reach economies in full health . On the contrary: the shock of tariffs falls on a world already grappling with pre-existing vulnerabilities - from record debt in some countries to the economic fragmentation already underway, up to the less regulated non-bank financial institutions such as hedge funds and crypto issuers - which "aggravate the risks" for financial stability and debt sustainability. Everyone - governments, financial institutions, central banks - will be "fundamental as a stabilizing force" and will have to "act decisively on multiple fronts to ensure price stability and promote sustainable economic growth, while preserving economic and financial stability", says the director general of the BRI Agustín Carstens.

(Online Union)

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