Establishing Negotiated
Frameworks Key to Stabilizing Global Markets: Economists

Muscat, 7 Apr (ONA) — Economic
experts emphasized that establishing negotiated frameworks to preserve the
trade balances of nations will lead to the stabilization of global markets
following the new U.S. tariffs.

The new U.S. tariff package on
imports has cast its shadow over the global economy, imposing rates of 34% on
China, 20% on the European Union, and varying percentages on several other
countries, while setting a minimum tariff of 10% on all U.S.
imports.

Dr. Mohammed bin Humaid Al-Wardi,
a member of the State Council, academic, and economic analyst, stated that the
coming period will be filled with trade tensions and negotiations, which may
impact global economic growth. He added that global markets will stabilize once
major economies reach negotiated agreements that safeguard their trade
balances.

He explained that the tariffs
imposed by the U.S. will disrupt global trade, particularly supply chains,
leading to weaker global economic growth—a concern echoed by the World Trade
Organization (WTO), which warned of the risk of a trade war following the new
U.S. tariffs. Projections indicate a potential 1% contraction in global
merchandise trade volume by 2025.

It is expected that the U.S.
tariffs will have additional effects, including fluctuations in the dollar and
other currencies, shifts in U.S. interest rates, and rising inflation. This
will introduce further uncertainty and instability into the global economy,
further weakening international trade.

He noted that the U.S. aims to
strengthen its negotiating position and secure greater gains in upcoming trade
talks through these tariffs, effectively opening the door for negotiations.
Countries will respond differently—some may adopt countermeasures, while others
will seek to adapt and mitigate the economic impact.

For his part, Dr. Yousef bin
Hamad Al-Balushi, an economic expert, pointed out that the primary objective of
the U.S. behind its new tariff decision is to restructure the American economic
cycle. This aims to enhance domestic investment, bolster the U.S. manufacturing
sector, and boost exports, thereby creating numerous opportunities for the U.S.
market.

He added that the impact of these
new tariffs will be substantial on the global economy, leading to reduced
worldwide demand—particularly from major economies such as China and the
European Union. This will also have repercussions on fuel demand from these
nations, resulting in lower oil prices. Additionally, the new U.S. tariffs and
retaliatory measures by some countries will affect global financial markets,
with international stock exchanges suffering losses due to investor panic.

He clarified that the Sultanate
of Oman, as part of the global supply chain, will be affected by the U.S.
tariffs—though to a relatively limited extent, particularly since U.S. imports
of oil, gas, and refined products are exempt from these duties. However, the
indirect impact will stem from lower oil prices due to reduced global demand
and slower worldwide growth.

He noted that opportunities exist
for Oman to enhance its appeal to foreign investment and position itself as a
supplier to the U.S. market. The 10% tariff rate remains more favourable
compared to the significantly higher rates imposed on many countries, such as
China and Taiwan. Moving forward, Oman must actively promote its economy as an
attractive investment destination.

For his part, economic expert
Lo’ay Bataynah emphasized that the United States’ imposition of new tariffs is
expected to trigger multiple global economic repercussions, most notably a
contraction in international trade volume. The increased tariffs will likely
slow the movement of goods, particularly between the U.S. and its major trade
partners such as China and the European Union. This could weaken global supply
chains, drive price hikes, fuel inflationary pressures, and raise import
costs—ultimately leading to higher prices for consumers.

He stated that the new U.S.
tariffs will reshape supply chains between countries and regions, as companies
may redistribute production lines to circumvent the duties. This could generate
opportunities for some developing nations while weakening the position of
others that rely heavily on exports to the United States.

He outlined the expected global
reactions to the U.S. tariffs, including retaliatory measures by other
countries—potentially sparking a full-scale trade war harmful to all parties.
Another scenario involves negotiations and revisions of trade agreements, particularly
free trade deals with the U.S., as some nations may seek reduced tariffs or
exemptions through diplomacy.

He also noted that among the
anticipated responses to the tariffs’ impact is government support for affected
industries, either through stimulus packages or domestic protectionist
policies. Many countries may strengthen regional ties and intra-bloc trade in
an effort to reduce reliance on the U.S. market.

China announced it will impose
34% tariffs on all imported U.S. products in response to America’s equivalent
tariffs on Chinese goods. Meanwhile, several European Union countries are
considering retaliatory measures against the U.S. tariffs.

Oil prices continued their
decline today, dropping by over 3% following Friday’s 7% loss, driven by fears
of an economic recession that could reduce demand for crude oil. Meanwhile,
several global stock market indices also saw losses at varying rates.

— Ends/Khalid