Scope Ratings, the European credit rating agency, has outlined five key reasons why it believes the trade war unleashed by US president Donald Trump is set to endure rather than recede.
These include reference to “buoyant markets, a resilient US economy, rising customs revenues, appeasement by trading partners and conducive politics.”
On markets, the performance of US equities, coupled with growing market complacency around trade escalations and de-escalations, leads the rating agency to suggest that there is space for Trump to “risk some unpopularity”, which would otherwise be limited by market reactions.
The US economy overall continues to show resiliency despite the trade tensions, and the rising tariff-based revenues are helping trim the ongoing US federal deficit. Scope Ratings estimates that “customs duties increasing to a record USD 66bn in Q2, with a further USD 28bn collected in July. This compares with monthly averages of less than USD 7bn last year. ”
And there has been relatively low levels of pushback from most countries to the trade policy of the administration, with few exceptions such as Canada and China. Most counterparties have been relatively yielding. This is driven by factors such as ongoing reliance on the US for security guarantees, but also because the Trump administration has been targeting bilateral deals rather than multilateral ones.
“The widening gap between tariffs imposed by the US and those imposed by trading partners on the US as well as on one another has created a two-tier global trading system that may strengthen relative trading terms for the US in the longer run, helping to curtail annual trade deficits,” Scope Ratings argues.
Finally, party politics in the US is once again favouring the position of the current administration.
“Republican Party concerns about major losses in 2026 mid-term elections have eased as the president’s approval rating remains around 90% with his party’s voters. The passage of the “Big Beautiful Bill” has bolstered the president’s political capital.”
