Just one day ago, Donald Trump was threatening a multi -term trade war with Canada, Mexico and China that would take the global economy to an unknown zone.
After twenty -four hours, we are in a somewhat different place with definitions – or taxes – against the closest neighbors in America and commercial partners for 30 days.
But 10 % definitions on all goods from China have passed, and Beijing responded by gender. So what are the possible economic consequences for these opening sulfos, and can this turn into a wider trade war?
China has already been subject to major American definitions and has been the first time of Trump. But the comprehensive nature of the new fees today from the White House on every one commodity imported from China – from games, to mobile phones, clothes – new and important.
Promised introductory revenge Beijing Including new fees on imports from the United States of oil, agricultural machines and some cars – much less intense. However, revenge takes us to the workplace, where the country that suffers from definitions feels that there is no choice but to return to show its citizens, which cannot be paid through a foreign power.
This is it Definition of the dictionary for the trade war – Economic historians warn that they tend to generate their momentum and can quickly go out of control.
Trump used almost every justification Under the sun for definitions, from increasing tax revenues to promoting American manufacturing and re -balance in trade. But one thing that confirms the last days is that the new president considers them a strong way to force other countries to do what he wants.
The tremendous and penal tariffs threatened Colombia when he initially refused to accept US flights from its two citizens, but raised the threat when Bogota was exposed.
The White House may also indicate the response of Mexico and Canada yesterday, as the tariff threats of evidence results in results. He threatened to ride riding North American trade deal Unless these countries emphasize control over the borders. Although the amount of additional countries that were already promised yesterday in border security for what they were already did are open to the question.
However, the problem in the White House using customs tariff threats in this way is that if other countries are not declined – or agreements are not reached – Trump may feel very well that he has no choice but to follow up or risk losing all credibility. The target country may feel that it should respond with anti -prepared measures, even if they prefer not to.
This high -risk dynamic – where things can go out of control in an atmosphere of lack of confidence and political pressure – are the reason that many analysts and economists are far from comfort from how things play with Mexico and Canada this week.
Another reason that many economists fear Diplomacy of Trump's diluted tariff is its impact on investment in business and trust. American car companies have An integrated industrial base deeply Through America, Mexico and Canada. Car parts cross these limits several times in the process of assembling vehicles.
The imposition of 25 % tariff fees on each of these movements will be disastrous on these companies. This North America's tariff has now been stopped, but it is very difficult to see our Canadian cars or executives who are committed to further investment in border supply chains soon – and perhaps for many years to come.
It will have negative effects on its productivity – as well as the wages of its employees in all three countries. The view of many economists is the presence of border supply chains that make these companies more productive than they were, and this raises American workers ’wages for the place where they will be manufactured in America only.
These same effects apply on a global scale. In light of Trump's tariff threats against the European Union, how many American companies are likely to submit in planned investments in Europe – and vice versa?
Countries such as Vietnam and Malaysia indirectly benefited from the American definitions imposed on China in the first period of the presidency, Donald Trump, as multinational companies turned out of China and their lands to avoid taxes and continue exporting to America. But what if Trump has now threatened customs duties against them as well?
The tremendous uncertainty in Trump's tariff has been injected into the global economy – even if it has not always been translated into actual new taxes – it is likely to have already damage.
