Euronext CEO Stephane Boujnah said the United States is starting to resemble an emerging market. He pointed to volatility and unpredictable decision-making under President Donald Trump’s administration.

The comment came amid financial instability following new US tariffs.

Trump’s tariffs impose a minimum 10% duty on all imports, with some as high as 50%. Boujnah said this strategy, typically used by emerging markets, aims to protect local industries but has created uncertainty for investors.

He noted capital flows shifting from the US to Europe, along with declining oil prices and long-term interest rates.

European shares slightly rebounded after the EU proposed 25% counter-tariffs on US goods.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Historical echoes of Smoot-Hawley tariffs resurface in current policy

The current tariff situation mirrors the Smoot-Hawley Tariff Act of 1930, which raised import duties by approximately 20% and triggered widespread retaliation.

After Smoot-Hawley, more than two dozen countries implemented retaliatory tariffs against the U.S., contributing to a 65% decrease in international trade between 1929 and 1934 and exacerbating the Great Depression 1.

Similar to today, the historical tariffs were initially aimed at protecting domestic industries (particularly farmers), but instead led to higher consumer prices and reduced economic efficiency across the broader economy 2.

Economists are already predicting negative outcomes from the new tariffs, with JP Morgan estimating consumer price increases of 1-1.5% and a 0.2 percentage point reduction in U.S. GDP growth due to heightened trade policy uncertainty 3.

The historical pattern suggests that protectionist trade policies typically produce short-term benefits for specific industries while creating longer-term economic damage through reduced trade, higher prices, and job losses in import-dependent sectors.

2️⃣ Emerging market characteristics increasingly visible in U.S. economic policy

Boujnah’s comparison of the U.S. to emerging markets has economic foundations, as the new tariff approach mirrors typical emerging market economic strategies.

Emerging markets commonly use high tariffs to protect developing domestic industries while trying to build competitive advantage, an approach being adopted in the new U.S. trade policy 2.