BBC World Business Report: Can the world survive Trump’s new tariffs?

On the day President Trump’s latest raft of tariffs came into force, the BBC World Business Report explored the global fallout from this aggressive trade policy. Speaking on the programme, Dr Linda Yueh, Adjunct Professor at London Business School, provided crucial context on the economic consequences for the United States and beyond.

The programme opened with a briefing from New York, where correspondent Michelle Fleury outlined the sudden implementation of tariffs ranging from 10% to 50% on imports from dozens of countries. Confusion reigned over exemptions, categories, and negotiations, with some economies—such as Switzerland—facing unexpectedly steep duties. The uncertainty is magnified by threats of further levies on sectors like pharmaceuticals and semiconductors.

Dr Yueh explained that while tariff revenues have indeed risen—some $100 billion collected since April—this represents only a fraction of the U.S. government’s $1.4 trillion deficit. More importantly, she stressed that tariffs are not “free money”: they raise prices on imported goods, fuelling inflation and squeezing consumer incomes. Already, U.S. inflation has accelerated, with core inflation nearing 3%, a level not expected earlier this year. For Yueh, this underscores the hidden cost of tariffs, which depress growth even as they generate headline revenue.

Reports from India, Indonesia, and the United States illustrated the human impact. Indian textile exporters described the measures as “doomsday” for small firms competing with lower-tariff rivals in Bangladesh and Vietnam. Indonesian prawn farmers warned of lost markets to Ecuador. In Massachusetts, a textile importer showed customs bills more than doubling overnight, undermining supply chains and profitability.

The programme also examined the knock-on effects in financial markets. While Wall Street remained broadly steady, the UK’s FTSE fell, with analysts citing tariff-driven uncertainty alongside domestic policy shifts. Susannah Streeter of Hargreaves Lansdown emphasised that global supply chains—from tech to timber—face serious disruption, with higher U.S. production costs likely to be passed on to consumers.

In a second intervention, Dr Yueh analysed the technology sector, noting the new 100% tariffs on semiconductors. With chips largely produced in Taiwan, she warned that such measures would prove highly disruptive, given America’s heavy reliance on overseas supply. While Trump’s policy aims to force investment and manufacturing onshore, Yueh argued that the near-term effect would be to stall growth, deter investment, and prolong uncertainty.

Her conclusion was sobering: America’s strong fundamentals may cushion the blow, but with rising prices, weaker investment, and trade talks dragging on for months, the costs of this tariff war will increasingly be felt at home and abroad.

To listen tot he entire programme, click here