Even the mere anticipation of new tariffs, sanctions, or restrictions can deal a serious blow to the economy and business investment activity. This was noted in a comment for RBC by Antonina Levashenko, Head of International Best Practices Analysis Department at the Gaidar Institute.
She noted that in today’s environment, the informational impact of statements by politicians and regulators can be comparable to the consequences of actual economic measures. As an example, Antonina Levashenko cited the markets’ reaction to Donald Trump’s statements about a possible tariff hike.
“In some cases, the uncertainty factor can be even more significant and cause comparable damage than the implementation of specific measures. We see that the mere publication of statements about a possible tariff increase led to an immediate reaction from the stock markets even before decisions were made. This is due to the rapid spread of information via the internet and the media, as businesses and investors begin to factor in risks in advance, postpone investment decisions, and revise their development strategies,” Antonina Levashenko emphasized.
According to the expert, China has proven more resilient to rising global uncertainty thanks to the economy’s adaptation following the trade war with the U.S. that began in 2018. Chinese businesses have reduced their dependence on the U.S. market, diversified their exports, and strengthened domestic demand.
The speaker noted that, according to the Bank of Russia’s monitoring data, economic uncertainty remains one of the key reasons for the decline in corporate investment activity. Additional pressure on businesses comes from high interest rates, an increasing tax burden, and difficulties with international payments and logistics.
Among possible support measures, Antonina Levashenko cited simplifying access to financing for small and medium-sized businesses, expediting IPO procedures, as well as tax incentives for investment and R&D.