The US President, Donald Trump recently slapped tariffs on steel and aluminium on Europe, Canada and Mexico, amidst on-going trade war with China, leading to a prospect of a wider and growing prospect of a trade war. What are implications for all the countries and country blocs involved? What are the ways forward for mutual resolution and benefits?
1. It may lead to protectionism.
2. Other countries may boycott US goods and services.
3. It will certainly persuade every other country to use trade as leverage to achieve its political and other objectives.
So long as leaders continue to put their own national interests first, there is no chance of resolution.
The implication is that the sanction will bring about new alliance an re-alliance among countries of the world. Mexico and Canada might enter into trade partnership with Russia, China and some Asian Tigers. Most of the European nations will also re-aligned with themselves or align with China, India and Brazil. At the end, China will be the highest gainer.
ALL WILL SURVIVE, MEXICO MAY FACE SOME PROBLEM, BUT ILLEGAL TRADE WILL CONTINUE
Mexico, the EU and Canada also immediately announced plans to retaliate with their own tariffs against American products.
It is politics, and there is no complete truth in it.
Everything goes in politics
regards
The answer to these questions is very complex. I can only say the following:The country blocks will be reconfigured. Depending on national interests, the current alliances will be modified. Trump's actions change the rules of commercial diplomacy. Thus, we will see new blocks of countries and probably new trade agreements appear. The response at a global level will be regrouping with a new logic: neutralize Trump's policy.It is difficult to reach a solution of mutual benefits, especially when one of the parties is not interested in sharing the benefits of negotiation.
The sanctions include China (more than $60bn worth of Chinese imports), which has raised the prospect of a trade war that threatens to engulf the global economy.
It is worth noting that not only will US and Chinese businesses and consumers suffer from dampened demand and higher prices of goods, but other countries will experience collateral damage and will retaliate.
For your profound perusal, an article from Prof. John Komlos (The Economic Roots of the Rise of Trumpism) is attached. It very well explains the ' logic' of this 'new' political paradigm, from the viewpoint of economic history.
Well, this is an ego-centric phenomenon causing lots of problems within and without US.
We don’t know, and let us not draw in history. Look at the picture of trade nodes. It is more dispersed than in decades past. Secondly, the system is more flexible. Digitisation allows quick mobilisation of the nodes. So, it is a dynamical system. A few high amplitudes will emerge but will be quashed by technology. Otherwise, we cannot draw a trajectory of the dynamics.
Let’s reflect. This trade talk is a big opportunity for Africa. It is a stoppage in the policy space, which our policy actors should use to progress hitherto difficult fronts. Formally, it provides a pocket of equilibrium in a dynamical space. Whether it turns out to be stable or not depends on the preparation our leaders have made for such crises. Have we made the requisite prep?
The policy keeps changing. Think of Helsinki Summit (Trump & Putin).
The most important thing is the political divide between the U.S. president and the members of the congress especially on issues related to foreign policy. We should keep in mind that president Trump is a great expert in business affairs ,but he is quite naive and inexperienced in political matters. The trade war waged by the president has already hurt America's traditional partners. If not changed, the policy is going to influence the global , geopolitical conventions leading to US isolation and resulting in retaliatory measures.
Nice comments! This really is a how tradewars get started. Such tradewars bear dire implications for the global economy. Trump is indeed challenging the network of political and economic relationships that essentially every post-World War II president has treated as the foundation of American international influence.
Now, see what will happen with the global trade deals recently negotiated by Trump and Jean-Claude Juncker, the president of the European Commission. How about the rest of the world, particularly China!
China has stared employing its own retaliation (tariff) against US products as direct reaction to a global trade war initiated by US..
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