President Trump has been full of surprises from the moment he entered the White House. Mister Trump is, without a doubt, a contradictory politician in many political spheres. However, when it comes to trade, that same inconsistent politician is suddenly serious and accountable. So when the phrase “trade war” starts roaming the newspapers and portals, it is not just smoke; its fire too.
On Trade War
According to CNN, a trade war is usually the result of protectionistic politics. If you follow that logic, a trade war is the direct consequence of Trump’s Protectionism. Trade war occurs when one country imposes embargos, tariffs or quotas on other nations or particular products.
Trade war rarely leads to armed conflict but can have political implications for all those affected by the war. This can, in turn, lead to armed conflict.
Where There’s Smoke…
Why are people talking about trade war? Well, President Trump promised to impose 25% on steel and 10% on aluminum imports, starting next week. That is smoke; will there be fire?
According to HuffPost, no, but not because Trump will not keep his promise, but because the trade war has been going on since the 1990s. The globalization process (which had in mind global stability and peace) is failing, and the far right movements in Europe, Trump’s election, and China’s authoritarian politics are proving that statement.
Winners and Losers
Assuming the Trump does what he promised to do, who would benefit from this war? Well, everyone and no one. Trump wants to protect domestic steel and aluminum industry. However, companies that import steel and aluminum from abroad (like Ford and Boeing) would suffer from these prices.
And it is not that only these big companies would face the consequences. Prices of anything from baseball bats to beer cans. Sales would probably go down (because other nations would retaliate against the U.S.)
And don’t forget the fact that countries affected by this trade war (like China) own a lot of U.S. debt. If hit affected by this war, they would probably retaliate by dumping this debt, thus directly destabilizing the U.S. economy.
In short, loses would probably outweigh the gains.
You can’t start a war without enemy’s retaliation. The New York Times suggests that the E.U. leaders already promised to increase the taxes on American products such as Harley Davidson motorcycles and jeans. But there is one bigger player involved in all this mess: China.
China has been the target of Trump’s hawkish rhetoric from the moment he started his presidential campaign. Although CNBC claims that China doesn’t want a trade war with the U.S., it is ready to defend its interest.
So, it is tough to predict the winners and losers of this war. U.K said that “Trade wars are bad and hard to win,” alluding to the President Trump’s tweet that “Trade wars are good and easy to win.” Will there be a war? Only time will tell.