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US President's trade war could get out of control, but don't panic yet
来源： 编辑：编辑部 发布：2018/06/27 08:48:35
THE International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD), and the majority of investment banks and think tanks are concerned about the latest round of tit-for-tat tariff battles.
They have condemned them, and some - including the IMF's boss Christine Lagarde - have rounded on the main protagonist: US President Donald Trump. But they have not yet started to panic, according to a report by UK's The Guardian.
The European Union's retaliation against steel and aluminium tariffs imposed by Mr Trump amounted to US$3.4 billion on US products including bourbon, peanut butter and orange juice.
It's virtually the same targets the EU picked in 2002 when US President George W Bush thought it might profit him to slap steel and aluminium tariffs on European suppliers.
The sum of money involved is small and, compared to the trillions of dollars traded each year, almost a rounding error. But in 2002 it worked and Mr Bush backed down.
In two weeks, the US will start taxing $34 billion of Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on American soybeans and other farm products.
An escalation of tariffs between the world's two largest economies should not be downplayed. A civilised arguement with the EU is one thing: a determined effort to punish China for a long list of trade-related misdemeanours is another.
The battle seemingly has no end and the fallout might not just cost consumers money: it might also destabilise decades-old global trading arrangements.
Mr Trump's comment that he wanted to banish the sight of Mercedes cars in New York followed his administration opening a trade investigation into vehicle imports, which would result in a 20 per cent tariff on cars unless action was taken by the EU.
A 20 per cent tariff, up from 2.5 per cent, on the cost of a foreign car could lower eurozone GDP by 0.3 per cent at least, according to Bank of America Merrill Lynch. It would take a 7.5 per cent appreciation in the value of the dollar, and a concomitant rise in the purchasing power of prospective American customers, to offset such a rise.
They have condemned them, and some - including the IMF's boss Christine Lagarde - have rounded on the main protagonist: US President Donald Trump. But they have not yet started to panic, according to a report by UK's The Guardian.
The European Union's retaliation against steel and aluminium tariffs imposed by Mr Trump amounted to US$3.4 billion on US products including bourbon, peanut butter and orange juice.
It's virtually the same targets the EU picked in 2002 when US President George W Bush thought it might profit him to slap steel and aluminium tariffs on European suppliers.
The sum of money involved is small and, compared to the trillions of dollars traded each year, almost a rounding error. But in 2002 it worked and Mr Bush backed down.
In two weeks, the US will start taxing $34 billion of Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on American soybeans and other farm products.
An escalation of tariffs between the world's two largest economies should not be downplayed. A civilised arguement with the EU is one thing: a determined effort to punish China for a long list of trade-related misdemeanours is another.
The battle seemingly has no end and the fallout might not just cost consumers money: it might also destabilise decades-old global trading arrangements.
Mr Trump's comment that he wanted to banish the sight of Mercedes cars in New York followed his administration opening a trade investigation into vehicle imports, which would result in a 20 per cent tariff on cars unless action was taken by the EU.
A 20 per cent tariff, up from 2.5 per cent, on the cost of a foreign car could lower eurozone GDP by 0.3 per cent at least, according to Bank of America Merrill Lynch. It would take a 7.5 per cent appreciation in the value of the dollar, and a concomitant rise in the purchasing power of prospective American customers, to offset such a rise.