S&P Global Ratings stated in its latest report on Thursday that the newly elected president of usa, Trump, proposed a 10% tariff on all imported commodities and a high 60% tariff on chinese commodities during the campaign. S&P Global believes that this proposal may not be fully implemented, but could become the starting point for Trump's negotiations of 'sky-high demands' at that time.

The report points out that it is unlikely for the tariff rates to actually reach the levels mentioned above. However, the report also adds that if Trump really implements this plan to impose a general 10% tariff on all core commodities imported into usa, it could push the Consumer Price Index (CPI) up by as much as 1.8 percentage points, which could cause inflation to rise in Trump's first year in office.

However, the report adds that this should only be a one-time change in prices and should not result in sustained inflationary effects.

S&P Global Ratings also stated in the report that considering the income losses of usa households and the impact on usa exporters, the overall drag on the country's Gross Domestic Product (GDP) could be as high as 1 percentage point.

S&P mentioned that raising the tariffs on chinese commodities to 60% could lead to a 1.2 percentage point increase in usa inflation, while the drag effect on GDP could be around 0.5 percentage points.

The report further adds that these plans could trigger short-term inflation as businesses face higher input costs, and consumers would need to pay higher prices for finished products.

S&P Global also stated that if political developments affect the strength of usa institutions, jeopardize the dollar's status as the world's main reserve mmf, or if usa's already high deficit further increases, it could potentially downgrade usa's rating within the next two to three years (currently AA+).

S&P Global added that its current financial forecast is based on the assumption that the government deficit will remain at the current level.

S&P was the first of the three global rating agencies to strip the USA of its AAA sovereign rating. In August 2011, S&P officially announced the downgrade of the USA's AAA long-term sovereign debt rating by one notch to AA+, with a "negative" rating outlook. This marked the first time since 1941 when S&P began sovereign ratings that the USA lost its 3A sovereign credit rating, breaking the myth of maintaining the highest rating for nearly a century.

Editor/Rocky