Quarterly country and sector risk update – with a focus on Türkiye, credit is back (somehow) and trade war checkmate

The US administration's decision to impose a 25% tariff on auto and auto parts imports will add 1.2pp to the US global import tariff rate, risking up to USD74bn in export losses globally. The focus on tariff reciprocity on 2 April could further add 1pp to the US global import tariff rate. Both moves will bring it to around 10% before agreements are reached. But the Trump administration may not be looking for reciprocity only in tariffs, but also in trade balances more broadly. Aggressively raising tariffs to 25% on sectors and countries that account for most of its trade deficit (excluding China) could lead to more than USD150bn of total export losses for Mexico, Canada, Vietnam and India. Exporters must adapt strategically to these challenges. Currency depreciation has been observed in several emerging markets, including Southeast Asia and South America, as a tactical response to potential tariffs. Additionally, sectors with high margins, such as computers & telecom, energy and pharmaceuticals, may lower prices to maintain competitiveness in the US market.