US President Donald Trump’s tariffs are increasingly clogging up the wheels of a world economy which for decades were greased by predictable and relatively free trade.

Big-name multinationals, right down to niche e-commerce players last week cut sales targets, warned of job cuts and reviewed their business plans, while major economies revised down growth prospects amid bleak data read-outs.

While financial markets are betting that US and China will pull back from an all-out trade war and that Trump will cut deals to avert higher tariffs on others, the sheer uncertainty of where this ends has become a major drag factor in itself.

“US tariff policy is a serious negative shock for the world in the near term,” said Isabelle Mateos y Lago, group chief economist at French bank BNP Paribas.

“The US tariffs end-game may be further away and at a higher level than previously thought,” she said of blanket US tariffs currently set at a baseline of 10 per cent alongside higher, sector-specific........

© Dawn Business