It started with customs tariffs, but the trade war is quickly climbing beyond import taxes, becoming a battle of an eye for a wider eye.
Customs of 25% customs imposed by President Donald Trump on Canada offended the country’s leaders, to the point that Ontario ripined, removing the shelves from stores.
Ontario Governor Doug Ford, or turning off the electricity sent to three US states, raising the spectrum of increases in electricity or even blackout invoices.
This promised briefly, applying 50% customs rates to all American imports of Canadian steel and aluminum before calming down.
It is easy to see how this trade war can quickly be out of control. If world leaders are not careful, they can get stuck in a climbing cycle that is difficult to escape.
“This game exploded in other areas,” explains Mary Lovely, senior member of the Peterson Institute of International Economics.
“Of course I will answer”
It is not just a trade war between the US and Canada.
A to the initial increase in 10% Trump rates imposed by Trump in February, announcing retaliation tariffs, as well as new export controls and adding PVH Group, owner of Calvin Klein, to a black government list.
On Wednesday, the European Union to Trump’s steel and aluminum tariffs, aiming at the ganga pants, the boats and the Americans whiskey, to the great discouragement of the US beverage industry.
Asked about EU’s retaliatory tariffs, Trump said, “Of course I will answer.”
And answered.
On Thursday, Trump threatened to apply one – 200% – about wine, champagne and other European alcohol.
In other words, Trump retaliated against the retaliation of the EU to Trump’s tariffs.
What if the EU retaliates?
The tariffs are “Wuindex [limpa-vidros] The Trump “
The climb of the trade war alarmed, executive directors and economists – to.
“Will this be out of control?” Kent Smetters, director of the faculty of the APARTARY model Penn Wharton, said in an interview with CNN.
Smetters, a professor at Wharton School at the University of Pennsylvania, where Trump has graduated now, now thinks it is an “unknown” if the US economy will recess this year.
The widening of the trade war was predictable.
After all, Trump is applying tariffs, a commercial instrument, to areas not related to commerce, such as immigration, fentanile and the protection of the dominance of the US dollar. Trump even talked about using tariffs to press Russia to make a peace agreement.
“This is Windex [limpa vidros] by Donald Trump. He sprinkles him in everything, ”says Lovely, comparing the president’s love for tariffs with the father of the movie ‘My Big Fat Greek Wedding’, who thinks Windex can solve any problem. “Any restrictions we had in relation to the commercial policy that kept in the trade policy range disappeared. But I must say that in this case it was the US that started. ”
The trade war can warm even more
And Trump has already given signs that he won’t end her anytime soon.
Despite Wall Street’s growing resistance, Trump threatened with a wide range of additional tariffs, including reciprocal tariffs scheduled for April 2. These imminent fares, if they advance, can trigger new retaliation.
“The last weeks have remembered us that trade is emotional. Countries can take things to the personal side. And there are great personalities involved in these days, ”explains Christine McDaniel, senior researcher at George Mason University Center and former commercial guardian of President George W. Bush.
Ford, the Canadian politician who threatened to cut the US electricity and who, for a brief period, imposed a 25% surcharge on Trump’s particularly vocal electricity exports.
Mexican President Claudia Sheinbaum, on the other hand, adopted a different approach. On Wednesday, Sheinbaum said the country would wait until April 2 to respond to Trump’s fares.
All of this is increasing the uncertainty of investors and business leaders.
“Human behavior is very difficult to model and predict. Commercial economists have been made life easier for 30 years. But we have no models for this new world, ”says McDaniel.
Alarm in the direction
American companies are increasingly concerned with the consequences of the trade war.
Business Roundtable said on Wednesday that its CEO economic perspective rate has decreased and that CEO reduced their hiring and investment plans.
The vast majority (85%) of the executive directors are opposed to Trump’s approach to trade, according to a survey of about 100 major US executive directors at Yale Chief Executive Leadership Institute CEO CEO CEO CEO.
The Yale event, held in Washington on Tuesday and was attended by CEO of JPMorgan Chase, Pfizer, American Airlines and other companies, revealed that 94% of CEO respondents are concerned that the tariffs are inflationary and 85% believe that Trump’s tariffs are coming out of Culatro.
Jeffrey Sonnenfeld, founder of the Yale Chief Executive Leadership Institute, explains to CNN that business leaders universally believe that there are legitimate reasons for applying tariffs selectively. But Sonnenfeld said the CEOs are “annoyed” with the variable justifications offered by the administration for Trump tariffs.
“The widespread attack on allies, instead of opposing and rival nations, made the CEOs dismayed and embarrassed,” Sonnenfeld says in an email.
Of course, it’s too early to know how the trade war will evolve – and what will be the final impact on the economy and on financial markets.
Foreign leaders may be reluctant to continue the climbing cycle so as not to further impair their local economies.
“They know the rates are bad for their economies. This could be a natural break in this eye for an eye, ”says Lovely.
It is also possible that Trump is forced to reduce tariff pressure if the US economy begins to actually weaken or if Wall Street makes an even larger tantrum.
“The president is in a difficult situation and every tariff (or threat of fare) makes his position more difficult,” Simon Johnson, director of the MIT, Email by CNN, by email.
“If he continues in this direction, prices will rise and the economy will slow down.”
