Every time Donald Trump has waved his plan to heavily tax imports in the United States, the world has reacted as if the threat will be delayed, mitigated, or withdrawn.
On Wednesday, the American president will reveal in the Rose Garden at the White House how determined he is to start a trade war with the rest of the world and effectively put an end to decades of economic globalization, as reported by BBC in an analysis published on its website.
It is possible for the Republican leader to launch the equivalent of a ballistic missile barrage in the global commercial system, by applying a universal tariff on all foreign goods and services destined for America.
A universal rate of 20% is apparently the only way to reach the collection of massive revenues, in the range of trillions of dollars, as some of his advisors claim.
Ignoring the apparent risks related to recession and inflation, today’s leaders in Washington are pushing to alleviate the massive trade deficit of the country, estimated at 1.2 trillion by 2024, in terms of imported goods.
<h2>Trump’s trade war would cost the world 1.4 trillion dollars</h2>
In recent days, Trump has claimed to be aware that the US tariffs will trigger “reciprocal” measures from trading partners.
He stated that the USA will be “amiable” with partner states, but it is not clear whether this “amiability” excludes the widespread imposition of double-digit tariffs.
Such a system, with corresponding reprisals on a global level, would lead to a 1% economic downturn in the United Kingdom, enough to cancel the GDP growth and trigger pressure for tax increases and/or government spending cuts.
According to a study conducted by Aston University Business School, the total cost of the global trade war initiated by Trump could be $1.4 trillion (1,400 billion) dollars.
At the level of the end consumer, the prices of products will increase.In the industry, there are expectations that the European Union will target American technology companies.In the United Kingdom, the situation is being evaluated where Keir Starmer’s government would choose not only to refrain from retaliation, but also to offer a significant tax reduction for large technology companies from the USA.
<h2>BBC: The Trump administration believes that globalization has not benefited wealthy countries and wants to break away from this model</h2>
Trade wars are difficult to win and easy to lose for everyone, notes BBC analyst, and a universal tariff of 20%, or an equivalent measure, would be a historic blow to the global trade system.
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