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Entrepreneur
5 hours ago
- Business
- Entrepreneur
Historic Perspectives on Tariff Policies and Modern Impacts
Today, global trade debates over tariffs and trade policies often dominate headlines. A closer examination of these issues reveals that the roots of today's tariff practices extend far back in... This story originally appeared on Due Today, global trade debates over tariffs and trade policies often dominate headlines. A closer examination of these issues reveals that the roots of today's tariff practices extend far back in history. Once designed to aid the recovery of nations emerging from conflict, these policies have taken on new dimensions in today's global economy. The discussion centers on how a policy intended to support post-war reconstruction now influences automotive trade and international business strategies. The Origins of Tariff Policies Tariffs were initially implemented with specific goals in mind. After World War II, several countries that suffered significant devastation had to rebuild their economies. In that context, the United States allowed other nations to impose taxes on American exports. This arrangement helped protect developing markets by limiting the competition from large, well-established American companies. The measure was not designed to penalize the United States. Instead, it was a way for many European and Asian cities, which had endured extensive damage during the war, to gain a foothold in their economic recovery. Cities such as Berlin, Tokyo, and London were among those that benefited. These measures enabled local industries to grow and stabilize, thereby supporting broader recovery efforts during a time when rebuilding was paramount. Over the decades, however, the global economy has seen substantial changes. While the original intention was clear and rooted in the necessities of the post-war period, many of these tariffs have persisted in modern trade regulations. The continued existence of such tariffs now invites scrutiny and debate, as they impact international competition and domestic industries in ways that were not foreseen at their inception. View this post on Instagram Modern Applications and Effects Today's tariff policies continue to influence global trade practices. Authorities still enforce tariffs that were initially designed for a very different time. A key example is evident in the auto industry, where tariffs play a significant role in shaping market dynamics and international competitiveness. The persistence of older tariff rules has led many experts and market watchers to question their continued application. They argue that there is little justification for protecting specific international auto industries when market conditions have evolved dramatically since the post-war era. European manufacturers, such as those from Germany, have grown strong enough to compete in global markets without the need for the historical shields that once protected their nascent industries. The Case of the Auto Industry The automotive sector serves as a clear example where historical tariff policies clash with modern market demands. European countries impose higher tariffs on American-made cars. This protection was once beneficial when U.S. auto makers were expanding their reach and dominating global trade. However, the industry dynamics have shifted. In addition to the auto industry, other sectors are also feeling the impact. The historical justification for high tariffs was protection and recovery support. However, local and international players now argue that tariffs can hinder competitiveness and increase costs for consumers. These criticisms suggest that policy reforms in the tariff system may be necessary to better align with modern market dynamics. Contemporary Critiques of Tariff Policies Recent political debates have brought new perspectives to the forefront. Recent events have sparked controversy over measures to implement reciprocal tariffs. Critics of these new policies see them as mismatched to modern economic circumstances. Some prominent figures have openly questioned the merits of such measures. They point out that the current policies are an extension of historical practices that may no longer have the same benefit. Their arguments assert that applying these old policies in a modern context might create more tension than support economic recovery or growth. The market reactions have been mixed. On one hand, the introduction of reciprocal tariffs has generated political support among certain groups. On the other hand, many economic experts criticize these moves as ill-suited for a globalized market. They argue that such tariffs have a historical basis that does not justify their blanket application in modern times. Examining the Historical Context To fully appreciate the current debates over tariffs, it is essential to examine their historical context. After World War II, Europe and parts of Asia were in dire need of support to rebuild their industries and economies. The tax measures imposed on U.S. goods were part of a broader strategy aimed at jumpstarting these economies. The case of tariffs on automobiles effectively demonstrates this point. With separate tariff rates for U.S. vehicles and those produced elsewhere, questions of fairness and relevance are continually raised. Consumers ultimately bear the costs, and the protective measures may end up stifling competition rather than promoting it. Historical Intent: Tariffs were initially introduced to help rebuild economies after a major conflict. Tariffs were initially introduced to help rebuild economies after a major conflict. Modern Challenge: Outdated tariff rules now clash with current economic realities. Outdated tariff rules now clash with current economic realities. Sector Impact: Industries such as automotive manufacturing face differing tariff rates that affect international trade. Balancing Policy with Modern Economy Modern trade policies must navigate the challenge of adhering to historical precedents while remaining relevant to today's dynamic economy. Policymakers face the task of determining whether longstanding tariff rates continue to serve the best interests of contemporary industries and consumers. The auto industry story is a clear indicator of the broader implications. As European countries impose higher tariffs on American vehicles, the inherent inequities in the system become more pronounced. Industry observers note that the protection once extended to struggling domestic sectors may now contribute to market inefficiencies. For many, the answer lies in modernizing these systems to reflect current global trade practices. Reducing or realigning tariffs could lead to improved relationships between trading nations and more balanced competition. Such adjustments might also foster an environment where domestic companies are encouraged to innovate and compete on a level field. Confronting Political and Economic Debates Political discourse surrounding tariffs has intensified in recent years. The debate centers on whether these measures, which once helped rebuild economies, still play a valuable role. Critics argue that policies introduced many decades ago do not translate well into the current era. They express concerns that continuing with such policies helps fuel trade tensions and creates economic challenges for consumers. Some political figures have been vocal in their criticism. They point out that reciprocal tariffs, intended to create balance, have instead become a source of contention. Critics note that these tariff adjustments often seem disproportionate and fail to address the underlying changes in market conditions. As the debate continues, it is clear that finding a balance will require input from economists, policymakers, and industry representatives alike. The situation calls for a collaborative approach that considers historical context and the demands of modern trade. Looking Ahead The discussion on tariffs is far from over. As international trade evolves, so too will policy debates about how best to protect domestic industries while engaging in a fair exchange with other nations. The historical reasons for imposing tariffs now serve as a reminder of a past era. Yet they also challenge today's policymakers to decide whether these measures continue to meet their intended goals. Looking forward, adjusting these policies might not only reduce tensions but also pave the way for a more efficient trading system. As industries mature and global competition intensifies, many believe that a careful reevaluation of tariff rates is warranted. Such reconsideration could lead to a reduction in consumer costs and stimulate further economic growth. Though tariff policies have deep historical roots, the current economic climate presents an opportunity for reform. The evolution of technology and production methods means that nations can engage in trade with less dependency on protectionist measures. A modern approach could encourage fairer competition and promote innovation in a way that benefits both producers and consumers. Many experts, market analysts, and policymakers continue to monitor trade discussions. They suggest that this issue is not about discarding history but rather about adapting policy to serve modern economies better. The lessons from decades past inform the current debate, and in doing so, offer guidance for possible future changes. In conclusion, examining the history behind tariff policies provides valuable insights into why they exist and how they affect today's industries. The auto industry stands as a clear example where historical practices continue to influence modern trade. With ongoing debates and a call for reform, the future of tariff policies remains a topic that warrants close attention from both policymakers and the public. Featured Image Credit: Photo by Tima Miroshnichenko; Pexels The post Historic Perspectives on Tariff Policies and Modern Impacts appeared first on Due.
Malay Mail
8 hours ago
- Business
- Malay Mail
Courtroom tariff wars: Time for Malaysia to build a tariff-proof economy — Yap Wen Min
MAY 31 — On 29 May 2025, a US appeals court temporarily brought back President Trump's sweeping 'Liberation Day' tariffs, just one day after a trade court ruled them illegal. It was a reminder that recent shifts in US trade policy today are shaped not just by economic logic but by political swings — and even the courts now play a role in moderating that balance. For global partners like Malaysia, that means preparing for a world where trade rules are constantly doubted. According to BNM's Monetary Policy Statement (8 May 2025), the tariff measures announced by the US, along with retaliatory actions, have weakened the outlook on global growth and trade. The central bank also highlighted that the balance of risks to Malaysia's growth outlook is tilted to the downside, with references to external factors such as trade tensions and geopolitical uncertainties. Malaysia is among the countries subjected to these elevated tariffs, with a 24 per cent tariff on its exports to the US, justified by Washington as a response to trade imbalances — but applied without consultation. According to the Malaysia External Trade Development Corporation (MATRADE), the rationale behind Malaysia's 24 per cent tariff was based on the US administration's calculation of trade imbalances. In a Presidential Memorandum issued on 2 April 2025, President Donald Trump declared that under the International Emergency Economic Powers Act (IEEPA), large and persistent US goods trade deficits are a threat to national security. The memorandum also stated that its large trade deficits were mainly due to lack of reciprocity in bilateral trade relationships, disparate tariff rates, non-tariff barriers, and economic policies of key trading partners that suppress domestic wages and consumption. The tariffs, which targeted imports from most US trading partners including Malaysia, were introduced under the rationale of correcting 'unfair trade imbalances' (The White House, 2025). Earlier, in February 2025, Trump's administration had separately imposed additional tariffs on China, Mexico, and Canada for enabling the fentanyl crisis. This earlier line of tariffs adds another layer of complexity to the broader trade picture leading into the April 'Liberation Day' announcement. Even if the method of setting 24 per cent for Malaysia may look rational on paper, the way it was applied outside multilateral frameworks and without prior consultation makes it part of a larger erosion of predictable, rules-based trade. Indeed, it has already created ripple effects across supply chains and investment flows. A report by Fitch Ratings also highlighted that these tariffs could lead to increased costs and operational challenges for companies reliant on cross-border trade. In response to these challenges, Malaysia has sought to deepen its economic ties with other partners. Notably, during a state visit by Chinese President Xi Jinping to Kuala Lumpur in April 2025, Malaysia and China signed over 30 bilateral cooperation agreements aimed at enhancing trade and investment relations. These agreements are part of Malaysia's strategy to diversify its trade partnerships and mitigate the impact of US tariffs. At the Asean summit in Kuala Lumpur on 27 May 2025, Southeast Asian leaders reached a consensus that any bilateral trade agreements with the United States regarding tariffs should not negatively impact other member nations. Prime Minister Anwar Ibrahim, serving as ASEAN Chair, emphasized the importance of this unified stance to protect the region's collective economic interests amid global market volatility and the imposition of US-led tariffs that could impose duties ranging from 32 per cent to 49 per cent on six Asean countries. He also announced efforts to engage US President Trump directly to discuss these measures. Trucks drive past containers at the Port of Ningbo-Zhoushan in Ningbo, in China's eastern Zhejiang Province on May 28, 2025. — AFP pic We are entering a period where the rules of global trade are increasingly subject to reinterpretation. Legal challenges, geopolitical shifts, and executive orders constantly reshape what used to be predictable. For Malaysia, reacting case-by-case to new tariffs is no longer enough. In this uncertain climate, what's needed now is a structural, forward-looking strategy to insulate the economy from tariff shocks — positioning Malaysia not just as a victim of trade volatility but as a resilient and indispensable player in global supply chains. By 'tariff-proof', it implies making the economy resilient — able to withstand sudden tariff shocks without stopping growth or investment. Our strategy must tariff-proof the economy by diversifying risk and deepening competitiveness. Reshore and diversify supply chains Malaysia should scale up efforts to attract high-value manufacturing, especially in electronics and semiconductors, by capitalising on the global 'China +1' shift. Multinationals are already looking for alternatives outside China, and Malaysia is the front-runner in Southeast Asia for that trend. Leading global technology companies, including Microsoft, Google, and Oracle, have made substantial investments in Malaysia, reinforcing the country's position as a pivotal hub in the global semiconductor and digital infrastructure sector. The government can speed this up by offering targeted incentives like tax breaks, upgraded infrastructure, and workforce training to attract factories and R&D centres in strategic sectors. At the same time, developing more domestic capacity for key components — or sourcing them from trusted trade partners — would help buffer the impact if US tariffs or Chinese export controls disrupt critical supplies. Expand export support and insurance Even with diversification, Malaysian exporters will face new trade risks. The government should enhance trade finance and risk mitigation tools so that firms can weather tariff shocks. While Malaysia already provides export credit guarantees and market development grants, these should be boosted and made more flexible. It is also crucial to streamline export credit insurance, raise funding caps on trade missions, and help SMEs adapt products for new markets (e.g., halal certification, digital marketing) as recommended by the Federation of Malaysian Manufacturers. Such measures make Malaysian exports tariff-resilient by lowering the cost of finding and developing non-US buyers or adapting to changing rules. Position Malaysia as a trusted, neutral hub Geopolitically, Malaysia's strength lies in neutrality and multilateralism. As the chair of Asean, Malaysia has led calls for trade deals that don't harm neighbours, and this should be translated into concrete policy. For example, the government can work with Asean partners to create a formal Supply Chain Coordination Council. Regional coordination — such as pooled risk-sharing or regional sourcing strategies — can protect Asean economies from the impact of unilateral trade actions. On the home front, Malaysia should continue improving the ease of doing business with trade-friendly customs and financing. We should also promote our currency and banking as alternatives for regional trade settlement to ease heavy reliance on any one superpower's currency. In the US, our diplomat tells Washington that Malaysia is an ally with secure markets and reliable suppliers. We should similarly cultivate ties with China and Europe, offering to host assembly of goods that neither power wants to fully onshore. By actively marketing Malaysia as a stable bridge, we turn uncertainty into opportunity. None of these steps will be easy, but other countries are already moving in similar directions. In short, Malaysia must make its economy tariff-proof — by reshoring key supply lines, expanding export credit and insurance, steering investment into future-ready industries, and leveraging our neutral stance. By doing so, we show investors worldwide that Malaysia is a safe harbour amid trade turbulence. * This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
Yahoo
18 hours ago
- Business
- Yahoo
Why Altcoins Were Flopping on Friday
The trade war is becoming more unpredictable, and that isn't good for financial assets. Compounding that, a high-profile crypto bull was the subject of an unflattering profile in a top newspaper. 10 stocks we like better than Ethereum › A forgettable Friday on the equities market and intensifying worries about the state of global trade inspired many investors to avoid cryptocurrencies throughout the day. In late afternoon trading, it was hard to find any that were even trading sideways, let alone adding to their value. Among the host of decliners was top coin Ethereum (CRYPTO: ETH), serving as an uninspired example with a nearly 3% price tumble as of 4 p.m. ET. Utility cryptos Solana (CRYPTO: SOL) and Chainlink (CRYPTO: LINK) were doing worse with respective 4% and almost 7% plunges into the red at that point. Ditto for the over 8% slide of ever-volatile meme coin Dogecoin (CRYPTO: DOGE). Like equity investors -- and much of the business world, come to think of it -- crypto-heads were, once again, fretting about the stubbornly persistent trade war. The web of tit-for-tat tariffs initially spun by the Trump administration continues to ensnare all sorts of investments, on very understandable fears that the levies will negatively affect economic growth. The most recent developments in trade weren't encouraging. Towards the end of equity market hours on Thursday, an appeals court reversed a decision reached earlier in the day by the Court of International Trade. The latter body had ruled that many of the Trump tariffs were illegal, as the executive branch lacks the unilateral authority to levy them. The relief this engendered among the investment community, crypto proponents included, didn't last very long. Soon thereafter, that appeals court temporarily reinstated the tariffs in question, leaving them in place for an unpredictable length of time. There is some degree of overreaction here, in my view. Of course tariffs are harmful to almost any kind of financial asset, but this war is turning out to be significantly less destructive than feared. Trump and his team have backed off from many of their most serious threats, exempting certain large product categories (for example, smartphones) and pausing or even drastically reducing other levies. That said, there are other headwinds buffeting certain coins and tokens, Dogecoin being one of them. The coin, almost unarguably the highest-profile meme crypto on the scene, has a strong and vocal proponent in Tesla CEO and (now apparently ex-) federal government functionary Elon Musk. That was fine when Tesla was riding high on the stock exchange and Dogecoin received frequent shout-outs in Musk's account on his X (formerly Twitter) account. It's less beneficial now that the executive is becoming an increasingly polarized figure, not least for his divisive work with the Department of Government Efficiency (DOGE, as it's known by its convenient acronym). On Friday, The New York Times published an article detailing Musk's conduct in the thick of DOGE's efforts early in the current Trump administration. Citing unnamed "people familiar with his activities," the newspaper alleged that Musk conducted himself both professionally and personally in quite an unbecoming manner. Dogecoin holders were surely getting nervous about this latest hit to the reputation of the coin's No. 1 trading accordingly. I feel that while the trade war continues at any level, sentiment on cryptocurrencies will remain muted. That opens quite the possibility for bargain-hunting, though, as it's often beneficial to buy while other investors are sitting on the sidelines at best, and selling assertively at worst. This would be a good time for crypto bulls to flag coins and tokens that have suffered notable drops in value. That includes Ethereum, as it will undoubtedly stay a bellwether coin for the asset class as a whole. As I have previously, I'd recommend considering beaten-down utility coins, as they're the motor that will help drive crypto development generally (as they perform useful functions, in contrast to still-not-very utilitarian plays like Dogecoin). Before you buy stock in Ethereum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ethereum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Eric Volkman has positions in Ethereum. The Motley Fool has positions in and recommends Chainlink, Ethereum, Solana, and Tesla. The Motley Fool has a disclosure policy. Why Altcoins Were Flopping on Friday was originally published by The Motley Fool Sign in to access your portfolio
CNA
a day ago
- Business
- CNA
Firms must double down on digital transformation amid trade uncertainties: IMDA chief executive
The Infocomm Media Development Authority's chief executive Lew Chuen Hong has urged companies to double down on digital transformation, even amid mounting global trade uncertainties. He was speaking at the sidelines of the Asia Tech x Singapore (ATxSG) summit, reflecting on the country's role as a trusted player in the global tech ecosystem. Nicolas Ng reports.
Associated Press
a day ago
- Business
- Associated Press
Navigating Turbulent Waters: How Sustainable Supply Chains Can Thrive in a Disrupted Trade Era
As global trade policy fractures into a patchwork of bilateral agreements and shifting regulations, supply chains are being tested like never before. Efficiency, continuity, and compliance are no longer guaranteed – and yet, the push for sustainable practices is only intensifying. How can companies meet the growing demand for environmentally responsible operations while staying agile in the face of geopolitical and economic volatility? Join us for an eye-opening webcast exploring how forward-thinking supply chain leaders are embedding sustainability into their core strategies – not just as a compliance measure, but as a driver of long-term resilience and competitive advantage. Register now to hear how companies like DP World are navigating today's complexities with data-driven solutions, adaptive trade strategies, and bold environmental commitments. You'll learn: Don't miss this timely and practical conversation on the future of sustainable supply chains. Register Today! Visit 3BL Media to see more multimedia and stories from DP World
