'Collective Action is Key': Jefferies' Chris Wood on Responding to US Tariffs

According to investment strategist Christopher Wood, countries should respond collectively to the latest tariffs imposed by the United States administration rather than pursuing separate bilateral deals.

What Did Christopher Wood Say?

In the latest 'GREED & fear' report by Jefferies', Wood warned that fragmented responses would weaken the multilateral trade system that has underpinned decades of global prosperity.

The GREED & fear noted that the "rest of the world" needs to "act collectively rather than each country seeking to do its own deal with the US."

Wood also referred to the imposition of 50% tariffs on goods from India and Brazil, alongside a 100% tariff on imported semiconductor chips, as what he termed "xenophobic autarky".

The Jefferies' report further says that exemptions were granted to certain companies, including TSMC, Samsung Electronics, and SK Hynix, because of their investment commitments in the United States.

According to Wood, these moves represent a sharp departure from the principles of the international trading framework that originated with the General Agreement on Tariffs and Trade (GATT) in 1947.

The report added, "The reality is that America has now gone rogue as regards the international trading system, which has its origins in the GATT established in 1947. Meanwhile, there remains the legal question of whether Donald Trump has the authority to make these moves."

The US administration has also in a way adopted a flexible trade strategy by offering reduced tariffs to countries that pledge reciprocal benefits such as increased purchases of US goods, removal of trade barriers, or investment in American industries.

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