Impact of President Trump's Tariffs on Global Trade and Globalization
President Trump's announcement of reciprocal tariffs threatens to disrupt global trade and the existing global trading order. The impact of these tariffs on the world economy and the potential risks of a global trade war are discussed in this article.
Introduction
President Donald Trump's announcements of reciprocal tariffs on the US's trading partners could have a significant impact on global trade and the current global trading regime.
Global Trading Order
The US has historically been a driving force behind trade liberalization efforts and the establishment of a multilateral trade regime through organizations like GATT and WTO.
Effects on Global Trade
Data from the World Bank shows a steady increase in the trade-GDP ratio for the world economy between 1970 and 2008, but this growth has stagnated since then.
Global Recession and Protectionism
The 2008 global financial crisis led to a resurgence of protectionist sentiments, culminating in the recent rise of tariffs and the resurgence of industrial policy.
Current Trade War
President Trump's decision to raise US tariffs to 10% signals a new phase in the global trade war, with potential retaliatory actions from other countries.
Future Outlook
The future of global trade and globalization remains uncertain, with potential challenges in non-trade aspects like currency markets and financial flows.
Conclusion
The rise of protectionist measures and the escalation of trade tensions could pose serious risks to the global economy.