Trump Trade Wars one of the impact every one can see arising from Trump policies after his arrival in white house. In few sentences, the tough-talking American leader effectively declared a trade war against the world, particularly export-oriented nations in Asia. This is nothing short of a misguided, self-defeating measure, which will only accelerate America’s structural decline as the world’s superpower.
Over the coming months, the Trump administration is expected to impose new sanctions, targeting the heavy as well as hi-tech industries of rival economies, with a particular focus on China.
The annual global trade of the U.S. is worth around $5 trillion and the country ends with an annual deficit upwards of $500 billion. In the first year of Donald Trump’s presidency, it was $556 billion. Mr. Trump believes this deficit is proof that all its trading partners are unfair to America. He also believes manufacturing decline in the U.S. has weakened the country and traumatised its working class.
“A strong steel and aluminium industry are vital to our national security, absolutely vital… Steel is steel. If you don’t have steel, you don’t have a country,” he said, announcing the decision. The notion that the country’s greatness comes only from its ability to make things was central to Mr. Trump’s campaign.
With other countries planning retaliatory measures, the prospect of a global trade war will be at large but Mr. Trump believes it may be good for America. The European Commission may increase tariffs on American goods such as Bourbon whiskey, Levi’s jeans, Florida orange juice and peanut butter. American agriculture produce, aircraft and medical equipment could face pressure in the global market. America’s own industries that use steel and aluminium as raw materials could take a hit. Many economists have expressed fear that Mr. Trump’s measure may trigger a global slowdown.
It is unclear whether the tariffs on steel and aluminium will have the desired effect on the American economy, but the direct association of these sectors with the working class adds immense value to the decision. China, with which the U.S. runs the biggest deficit, will only be marginally affected. A more intense trade war is going to be in intellectual property and Mr. Trump has threatened to open that front soon.
This move has prompted America’s trading partners around the world to suggest they would retaliate. Some of the worst fears that arose during the last presidential campaign surrounding Trump’s potentially disruptive impact on global business appear to be on the verge of being borne out.
Almost overnight, Trump has poisoned historically warm relations with its strategic allies in Europe, Asia and Latin America, who are expected to take America to international courts for imposing unilateral trade sanctions.
Trump is hardly the only world leader today who believes globalisation and free trade have more cons and pros. But his explicit enthusiasm for economic conflict is unusual and misplaced. Trade wars ultimately hurt the economies of the countries involved and consumers. It starts with retaliation.
America and China are locked in a mutually assured financial destruction, thus any large-scale trade war would ultimately disrupt the world’s two biggest economies.