WASHINGTON: Unleashing another barrage of punitive trade tariffs on thousands more Chinese products, President Donald Trump has shown he is willing to pursue hardline policies — no matter the cost.
And as Trump’s attacks on Germany at the NATO summit this week demonstrate, that aggressive strategy extends to allies as well as traditional rivals and to security as well as trade, reports AFP.Stock markets over the last few days were recovering due to the view expressed by analysts, like JP Morgan and CFRA, that the initial salvos in the trade war were simply a “negotiating tactic.”
But Tuesday’s announcement that the administration would proceed with 10 percent tariffs on another $200 billion in Chinese goods as soon as September put an end to that more benign view, sending global markets tumbling on Wednesday.
That move comes on top of 25 percent duties on $34 billion in annual imports from China, with another $16 billion on the way, as well as steep tariffs on steel and aluminum from around the world.
And Trump has threatened to hit another $200 billion in goods from China, and put new taxes on auto imports, in a move largely aimed at Germany.
China, Mexico, Canada and the European Union have responded to each US move with retaliation of their own. Oxford Economics analyst Adam Slater said the total share of global trade facing high tariffs could rise to five percent.
Economists warn this poses a serious risk to the world economy, as it will depress investment and US growth and accelerate unemployment.But with the economy growing by as much as four percent in the second quarter, unemployment at the lowest in a generation, and corporate profits soaring as a result of massive US tax cuts, Trump may feel comfortable ignoring those fears.
With midterm elections coming in November, in which Trump’s Republican Party could lose seats in Congress, he may be more focused on the short-term, playing to his political base.
Instead of careful diplomacy, Trump has been “doubling down” on abrasive tactics, said foreign policy expert Heather Conley of the Center for Strategic and International Studies.
And because he needs to show his supporters he is getting something out of it, he will “just keep going and see who blinks first,” she told AFP.
While Trump has thrown some verbal head fakes that have alternately horrified and comforted trading partners and US businesses, he has moved consistently towards a tougher stance as other governments failed to succumb to his threats.