There has always been a general belief that Donald Trump‘s plans to impose high taxes on imports entering the US will be postponed diluted,or retracted.
He will not only demonstrate his seriousness about “the most beautiful word in the dictionary” today at the White House Rose Garden,but he will also successfully put an end to decades of economic globalization.
He might still accomplish this by imposing a uniform tariff on all imports into the United States,which would be the equivalent of firing a salvo of ballistic missiles into the international trading system.
The only way to access some of the enormous trillion-dollar earnings that some of his advisors have claimed is through the option of a 20% uniform tariff.
President Trump has been insistent in recent days that the US will be “nicer” to its trading partners and that the tariffs will be “reciprocal”.
If, for instance, the US decides that Value Added Taxes qualify as tariffs, then imposing tariffs on a large scale at rates of 10% or 20% is still possible.
Countries might be very roughly bracketed into various tiers of a tariff that is essentially global. “It comes down to President Trump,”a G7 negotiator told me over the weekend.
With comparable worldwide retaliation,a system like this would cause the UK economy to contract by 1%,which would eliminate growth and put pressure on policymakers to increase taxes or reduce spending.
An Aston University Business School study estimates that the global cost of trade diversion and price increases could reach $1.4 trillion (£1.1 trillion).
According to the PM,the UK would handle US tariffs calmly.
Before Trump’s ‘Liberation Day’ tariffs,there are three major unknowns
Why is Trump employing tariffs,and what are they?
Does Trump have a point when he claims that unfair trade affects the US?
Trump’s tariffs might increase the cost of six items for Americans.
The European Union is expected to target US IT companies,according to industry expectations. If the UK decides to grant a large tax relief to US big tech instead of just refraining from reprisal,the difference might be striking.
Winning a trade war is difficult, and losing one is simple.
The global trading system would be severely impacted by a uniform 20% tariff, or its equivalent, comparable to the notorious Smoot-Hawley tariffs from almost a century ago.
But something greater is at play here. The notion that “rich countries would move further up the value chain, while the poor countries made the simpler things” is why this administration believes that globalization has failed, as Vice President JD Vance stated in a speech last month.
The United States is leaving this world because that hasn’t worked out, particularly with regard to China.
China will be waiting if the United States offends its allies too much today. For instance, cheaper toys, clothing, and gadgets from the East that arrive in the UK and lower costs, diverting from the US market, could counteract the blow to US company in Europe.
What begins later today is intended to change not only commerce and America, but also the way the world has been governed.