Earlier this month, the Trump administration imposed a 25 percent tariff on imports of steel and a 10 percent tariff on aluminium on the European Union, Canada and Mexico. The tariffs angered US allies, who plan retaliatory tariffs on US goods.
The Trump administration … are putting the tariffs on a lot of their key allies as well as on their enemies in terms of the trade war. And that’s not going to help. It would be better if they would work with Europe to put some pressure on China for example, rather than creating a sort of atmosphere where it’s everybody against the United States.
Meanwhile, trade tensions with Beijing are escalating. Trump announced a 25 percent tariff on $50bn worth of Chinese imports on Friday, prompting China to hit back with a similar-sized set of levies on US goods, including orange juice, lobsters, soybeans, electric cars, cigars and whiskey.
So, has the trade war between the world’s two biggest economies started? Is Trump right about imposing tariffs? And what are the implications for the global economy?
Andrew Kenningham, a chief global economist at research consultancy Capital Economics, talks to Counting the Cost.
“I think the China-US situation is potentially … damaging for the world economy,” says Kenningham, who says that Trump’s tariffs will have “a negative impact both on the Chinese and business confidence more generally.”
However, he says “provided that the measures don’t go much wider than what has been threatened so far, these will remain issues for particular industries and for particular countries rather than something that threatens the overall situation of the global economy, which is actually still looking quite good.”
Asked about Trump’s trade politics, Kenningham says he agrees “with the vast majority of economists that protectionism is very unlikely to be helpful.”
“The way that the Trump administration is going about this is very odd, because they are putting the tariffs on a lot of their key allies, as well as on their enemies, in terms of the trade war. And that’s not going to help. It would be better if they would work with Europe to put some pressure on China for example, rather than creating a sort of atmosphere where it’s everybody against the United States.”
Also on this episode of Counting the Cost:
Brexit countdown: Why businesses are warning that parts of UK manufacturing at risk of becoming extinct. Gregor Irwin, chief economist at corporate advisory firm Global Counsel, joins us from Glasgow.
Video game industry boom: With an expected revenue of nearly $140bn this year, the world of video games is fast becoming one of the most popular forms of entertainment. The video game industry has long surpassed the music and cinema industry in terms of revenue. Rob Reynolds reports from Los Angeles.
Media mega-mergers: Why some of the biggest names in media are teaming up to survive. A US federal judge has approved for Telecom giant AT&T to buy content company Time Warner – which owns HBO and Warner Bros among others – for $85bn. John Hendren reports from Washington, DC.
Source: Al Jazeera News