Trade wars are not good, or easy to win

Trade wars are not good, or easy to win

"We have to protect our steel and aluminum industries while at the same time, showing great flexibility with people who are really friends of ours", the USA president said during a White House press conference.

It is possible that, with someone as inconsistent as Mr Trump in charge, this is where it will end.

Donald Trump's decision to add tariffs to steel and aluminum imports has shaken worldwide markets. Chinese imports to the USA have dwindled over the last decade, thanks to a series of country-specific tariffs; Canada and Germany have overtaken China as exporters to the US.

Last week, during a meeting with executives from America's leading steel and aluminum manufacturers, President Trump announced his new policy. "While there may be specific issues where we disagree, all three countries share the same goal of a modernized NAFTA in a way where no one is slighted".

While there are several factors behind the rising deficit with its non-FTA partners, the simple fact is that the FTAs the USA have clinched - comprising 40 percent of its total trade - have opened markets to the benefit of US exporters.

Perdue told the board he wasn't interested in articulating any "moral line", but has considered actions by the president and his administration that would make him leave his cabinet post.

We will be very flexible. One convincing argument is that the tariffs - whereas they would provide a shield to the USA steel industry - will increase steel prices, which will backfire on consumers and industries using steel, including the auto industry.

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Supporters, however, say it's less about a potential trade war and more about America defending itself in trade just as it would against military aggression. But the least bad one is the weighted-average applied tariff. These are very similar.

The reactions of other countries could also make an outright trade war a more protracted risk, and with it hasten the possibility of a return to a global recession.

Some US policymakers refer instead to the "bound" tariff. "And where one person is basically deciding, you know, tariffs go up or down depending on what kind of behavior ..." It's not fair to the American companies who are hurt by the uneven playing field, and it's also not fair to foreign consumers and businesses who might like to buy American products but are made to pay an absurdly high price. Ng doubted, saying it will only result in dispute in the World Trade Organization (WTO) for years.

Ng then put his Apple iphone on the table and explained how the iPhone alone may add 17 billion USA dollars to the fault trade deficit with China in 2016.

Trump pushed back as he visited western Pennsylvania, in the heart of USA steel country, where he boasted of his tariffs and denounced low-quality imports. Other things equal, this is sure to increase the trade deficit.

"I think this would be bad for Americans overall and reduce our economic potential over time, which had been boosted by the tax cuts a year ago and the regulatory reforms that were made", Ginn told WND and Radio America. "We are going to be doing a lot of that". "This method of data collection is based on the International Monetary Fund's Balance of Payments Manual, which was first released in 1948, and never appropriately overhauled to reflect the new complexities of global value chains". It will impose substantial costs, disrupt alliances and surely lead to yet more costly protectionism, by the United States and others.

Far from being "easy to win", a trade war is likely to prove very hard to reverse in the context of an already challenging and complex global environment. Well done, Mr Trump.