Donald Trump rates: Opening of savings fired in the commercial war

Only one day ago, Donald Trump threatened a multiple commercial war with Canada, Mexico and China that would lead the global economy to an unknown territory.

Twenty -four hours later, we are in a fairly different place with rates, or taxes, against the closest neighbors in the United States and the commercial partners waiting for 30 days.

But 10% tariffs on all imports of China’s goods have continued, and Beijing has responded in kind. So what are the possible economic consequences of these savings of openness and could become a broader commercial war?

China is already subject to important rates of the United States and has been since Trump’s first mandate. But the general nature of today’s new levies of the White House in each product that matters from China, from toys to mobile phones, to clothing, is new and significant.

Beijing promised tariff retaliation – Including new levies on imports from the US of oil, agricultural machinery and some cars, it is much less swept. However, retaliation takes us to the sand of the Tit-For-OT action, where the country that the tariffs feel foreign.

This is the Definition of the dictionary of a commercial war – And economic historians warn that they tend to generate their own impulse and can quickly control.

Trump has used almost all justifications Under the sun of tariffs, from the increase in more fiscal income to promoting American manufacturing and recourse trade. But one thing that the last days confirm is that the new president considers them a powerful way to force other nations to do what he wants.

He threatened with mass and punitive tariffs on Colombia when he initially refused to accept the US flights of his deported nationals, but raised the threat when Bogotá accepted.

The White House could also point out yesterday the response of Mexico and Canada as the threats of evidence rates produce results. Had threatened to ride en route Your own Free Trade Agreement of North America Unless those nations harden in border control. Although the additional amount that these two countries promised yesterday in border security in relation to what they were already doing is open to question.

However, the problem with the White House using tariff threats in this way is that if other countries do not go back, or do not reach the agreements, Trump might feel that he has no choice but to follow or risk losing all credibility. And the target country might feel that you have to respond with its countermeasures prepared, even if you prefer not to do so.

That high -risk dynamic, where things could get out of control in an atmosphere of distrust and political pressure, is the reason why many analysts and economists are far from being comforted by how things have developed with Mexico and Canada this week this week .

The other reason why many economists fear the diplomacy of Trump’s intimidating rate is its potentially chilling impact on business investment and trust. American car companies have a deeply integrated industrial base throughout the United States, Mexico and Canada. The automotive pieces cross those edges several times in the vehicle assembly process.

The collection of 25% of tariffs in each of these movements would be disastrous for these businesses. These North America tariffs have stopped for now, but it is very difficult to see Canadian automotive executives who commit themselves to a greater investment in those cross -border supply chains in the short term, and perhaps for many years.

That will have negative implications for productivity, and also for the salaries of its employees in the three countries. The opinion of many economists is to have cross -border supply chains makes these companies more productive than they would be and this raises salaries of US workers in relation to the place where they would be if they only manufactured in the United States.

These same effects apply to global scale. In the light of Trump’s tariff threats against the European Union, how many US companies will probably continue with the investments planned in Europe, and vice versa?

Countries like Vietnam and Malaysia indirectly benefited from the tariffs of the United States taxes to China in the first presidential term of Donald Trump, since multinationals transferred the manufacture of China and their territories to avoid taxes and continue exporting to the United States. But what happens if Trump now also threatens tariffs against them?

The great uncertainty that Trump’s tariff threats have injected into the global economy, even if they do not always translate into new real taxes, it will probably already hurt.