Global economic policy uncertainty at its highest post-pandemic level

Global economic policy uncertainty has reached its highest level in 2020, according to a visualcapitalist.com analysis, which highlights that while the tariffs imposed by the Trump administration aim to recalibrate supply chains, the US stock market has reacted negatively. So far, Canada and Europe have hit the US with retaliatory tariffs, while companies around the world are looking to diversify their supply chains, preparing for the consequences of the new tariffs. According to the cited source, the economic policy uncertainty index rose to 428.9 points in January 2025, approaching the record of 2020, the year of the Covid pandemic: 431.6 points. The index is measured in 21 countries, weighted by GDP. The analysis also shows how the index performed during key events in recent decades, which preceded the pandemic: during the Asian financial crisis (November 1998), it reached 141.9 points; during the dot-com bubble (October 2001) - 179.7 points; during the global financial crisis (October 2008) - 205.9 points; and when Donald Trump was elected president (first term, November 2016) - 251.3 points.

As the trade war escalates, Trump has hit Canada, the European Union, Mexico and China with significant tariffs. Recently, amid the 50% counter-tariffs imposed on American whiskey by the European Union, Trump threatened a 200% tariff on imports of alcoholic beverages from the community bloc. Meanwhile, Europe is considering imposing new retaliatory measures on American exports of steel, aluminum, beef and nuts.

At the same time, German carmakers are increasingly looking to foreign markets beyond the US, where they generate the most sales.

Like the EU, Canada plans to impose US tariffs in response to Trump's 25% tariffs on steel and aluminum imports. Canada is the largest exporter to the US of both steel and aluminum, with shipments valued at a total of $16.5 billion in 2024. The countermeasures also include 25% tariffs on tools, computers and sporting equipment, targeting a total of $28.9 billion in US exports.

According to some estimates, the price of SUVs assembled in North America could increase by $9,000 if a 25% general tariff is imposed on Canada and Mexico in the ongoing trade disputes.