US President Donald Trump did on Wednesday what he had said he would do, and impose a slew of tariffs on a large number of countries, with an executive order, and the intention of reducing the trade imbalances that have cost the USA jobs and growth. The economists round the globe have joined the affected governments in predicting that there will be a global economic slowdown, even as there may be a rekindling of inflation in the USA as imported goods grow dearer, and while any US-made substitutes also increase their prices. One of this prime targets has been China, for not only has it been slapped with additional tariffs that bring its total up to 54 percent, but countries where it exported goods so that they could manufacture finished goods for export to the US, have been targeted, like Cambodia, Vietnam, Thailand and Taiwan being hit with tariffs between 32 percent and 49 percent.
One suspicion that has been raised is that these tariffs are an attempt to reverse whatever has happened in the last 20 years or so in the name of globalization. Trump also represents the protectionist and isolationist trend in US politics, which had been in abeyance since World War II. The tariffs have also been applied to US allies, with the European Union with a 20 percent tariff imposed on it, Britain with a 10 percent tariff, India with 26 percent and Ukraine with 10 percent. Pakistan has had a 29 percent tariff imposed, which will probably hit the textile industry hard, and it should be remembered that the new tariffs are supposed to adjust for non-tariff barriers. One of the immediate effects has been the start of a decline in the world oil price, as traders prepare for reduced demand due to the expected contraction.
R trump has upended the world, and he may have helped send the USA into recession. The problem, is that he faces no accountability electorally, being in his last term. What he has done fails to recognize the basic problem, which is with the US economy; it is no longer the workshop of the world because it is no longer competitive, and no tariffs, non-tariff barriers or sanctions, or economic tools, can fix that.
