Trump's New Tariffs Are Just a Preview of the Chaos He Will Wreak on the Global Market
Just two weeks after his inauguration, President Donald Trump imposed steep tariffs on America’s three largest trading partners, raising the specter of a global trade war. In orders signed Feb. 1, he imposed 25% tariffs on imports from Canada and Mexico and added 10% levies on imports from China.
Although Trump had previously promised to do just that, his actions would still come as a shock to the world economicsThey will drive up prices, affect growth and sow uncertainty for businesses. Moreover, they are likely to be just the opening salvo for a new White House leader eager to impose tariffs that are both more aggressive and more global.
This is worse than anything he has done before. Canada, Mexico and China will have to suffer. Last time Trump at least introduced them gradually, increasing them year after year, this time it all happened at once
– writes The Economist magazine.
Trump's boldness in imposing new tariffs should dispel any doubts about his resolve to take a tough stance on trade, policyHe ignores warnings from business, diplomats and economists about the possible consequences.
In a fact sheet explaining the orders, the White House said access to the U.S. market is a privilege and tariffs are a "proven source of leverage to protect national interests."
There have been reports in recent days that he might delay the tariffs or take a more gradual approach. Canadian and Mexican officials have been scurrying back and forth in Washington, arguing that tariffs in North America, one of the most tightly integrated trading areas in the world, would be entirely counterproductive. It has done no good.
According to calculations, the duties will bring the US budget no more than 110 billion dollars, which is only 2% of its expenses. However, the rise in the cost of imported goods will lead to a serious burden for American consumers.
So while the new tariffs on Mexico, Canada and China are bad enough, they may just be a preview of the chaos Trump intends to wreak on the international trading system in the coming months.
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