Fiji will avoid new US tariffs, but broader global tariff increases could negatively impact its economy by disrupting trade.

US President Donald Trump campaigned on imposing tariffs of at least 60 percent on Chinese imports and of 10- 20 percent across the board on every other US trading partner.

He may withdraw the US from multilateral trade agreements and target bilateral trading partners that have a large trade surplus with the US, often perceived by Trump as “not paying their fair share”.

Over the weekend, Trump announced 25 percent tariffs on goods from Canada and Mexico on the basis that these countries had not done enough to stem the flow of illegal immigrants and the drug fentanyl.

He also announced a 10 percent tariff on imports from China.

However, overnight, he delayed the imposition of tariffs on Canada and Mexico by at least 30 days.

At this stage, ANZ Research believes Fiji will be spared from new tariffs, but a broad-based application of higher tariffs could disrupt trade and the global economy and have negative implications for Fiji.

Trump campaigned as a protectionist politician to shore up US industry.

However, IMF research suggests a 10% it-for tat import tariff from mid-2025 is likely to see US GDP fall by 0.4% in 2025 and another 0.6% in 2026.

The IMF also predicts global imports and exports will fall by 4%, sending the global economy into a recession, with global GDP falling 0.3% by late 2O26.

ANZ Senior International Economist Kishti Sen says a global recession and uncertainty around trade tensions will harm consumer confidence and job security and result in households cutting back on discretionary spending.

Overseas holidays fall into that category.

Sen says as Fiji’s economy is dominated by the external economic environment, in particular international tourism, a global recession would hurt its prospects.

Sen says Trump’s presidential style is often described as transactional.

He is a businessman who relishes the ‘art of the deal’.

In his last term, even China showed a willingness to engage with him when it negotiated to save tech giant ZTE.

Sen states only time will tell whether his focus on tariffs is a negotiation instrument to achieve better outcomes for the US.

He adds that if that is the case, a trade war and global recession may be averted.