No one should really have been surprised by US President Donald Trump’s autarkist announcement over the weekend. After all, he did tell the American people during his campaign for the White House that he would impose tariffs on countries that, he claimed, were not being fair in their trade dealings with America.

However, After Mr Trump’s announcement of 25 per cent levies on imports from Canada and Mexico and 10 per cent duties on Chinese goods fears of a global trade war started to spiral.

On Monday, stock markets slumped over concerns about the global economy.

Wire service reports told us that Wall Street’s three main indices fell sharply in early deals, but clawed back ground after Mr Trump postponed the introduction of tariffs on Mexico for one month.

That postponement came after last-minute talks on Monday between Mr Trump and Mexican President Ms Claudia Sheinbaum who, it is reported, agreed to send 10,000 troops to the US-Mexico border.

At the weekend, however, the London, Paris, Frankfurt stock markets finished in the red after Mr Trump warned that the European Union would be next in the firing line and did not rule out tariffs on the United Kingdom.

Additionally, Asian stock markets closed mostly in the red.

French news agency Agence France Presse (AFP) reported that shares in European automakers were hit particularly hard, with Volkswagen shedding 3.5 per cent and Jeep maker Stellantis down more than 4.5 per cent. VW makes some cars for the US market in Mexico, while Stellantis has factories in both Canada and Mexico.

“Investors fear that this trade war will result in a significant deterioration in the global economy,”
AFP quoted Mr John Plassard, an investment specialist at Swiss asset manager Mirabaud.

Since the announcement on Saturday, Canada has vowed to respond strongly to the tariffs. On Monday, Ontario, its most populous province, banned US firms from bidding on tens of billions of dollars in government contracts, and dumped a deal with Starlink, the satellite Internet telecommunications provider owned by Mr Elon Musk — President Trump’s controversial close advisor who, after pumping more than a quarter billion US dollars into Mr Trump’s election campaign, is running the so-called Department of Government Efficiency.

Despite Mr Trump’s insistence that the cost of tariffs will be borne by foreign exporters there is a real possibility that the measure will have an economic impact on American consumers. In fact, Mr Trump himself has admitted that Americans might feel “short term” pain.

That reality cannot be lost on us here in Jamaica, as it will likely affect our economy, particularly in the areas of remittances and tourism. Faced with increased cost of goods and services, Americans will most likely opt not to travel. The same is true for Jamaicans residing in the US who, in addition to travel, normally send money to their families here.

Similar scenarios will play out in Canada, where there is a large Jamaican Diaspora and which has grown as a source market for leisure travel to Jamaica in recent years.

The fact that over the years Jamaica’s tourism administrators have diversified our markets — moving into Latin America and continental Europe — should serve as a bit of a buffer from the fallout of this looming trade war.

However, Jamaica, and indeed other tourism-dependent nations, will not escape some amount of bruising. Our best bet is that common sense will prevail.