Global Unease Arises in Response to Donald Trump’s Tariff Talks; Nations May “Retaliate”

(VOR News) – Donald Trump’s statements regarding tariffs have generated worry among international nations and businesses. Many individuals feel that these tariffs may indicate the onset of an extensive trade war upon his return to office next year.

On Monday, the newly elected president warned both his supporters and adversaries, announcing his plan to promptly impose a 25 percent general tax on Canada and Mexico, as well as a 10 percent tariff on China. If he fulfills that threat or his campaign pledge to impose a 10 percent tax on all imports from the United States.

There will be retaliation against Donald Trump’s global economy.

Bernard Yaros, an economist at Oxford Economics, informed AFP, “We anticipate that all these other nations, especially advanced economies in Asia, will react similarly.”

He estimates that the tariffs and punitive actions imposed by the United States, particularly on Europe and Asia, will “depress growth” and trade flows, resulting in a decline in global GDP of 0.1 to 0.9 percentage points by 2026.

Ruben Dewitte and Inga Fechner, economists at ING, penned a letter cautioning that threats negatively influence sentiment before the introduction of tariffs and may lead to delays in hiring and investment.

A recent editorial in the Wall Street Journal asserts that President Donald Trump has consistently regarded tariffs as a “universal weapon” for negotiations.

The President of the United States announced on Monday that the elimination of tariffs on Canada and Mexico will go independently if the United States resolves the challenges of illegal drug trafficking and immigration.

Petros Mavroidis, a professor at Columbia Law School, jeopardizes enduring repercussions while attempting to augment the United States’ influence. Others speculate that he will exert pressure on nations until they yield to China’s positions.

He informed AFP that “his actions unequivocally alienated all of his allies.”

Erin Murphy, a senior analyst at the Center for Strategic and International Studies, asserts that President Donald Trump’s warnings exhibit “no differentiation” about the economic growth levels of other nations and their interactions with the United States government.

The discontent in Europe

Dewitte and Fechner contend that Europe might be profoundly impacted, warning that “a potential new trade war could propel the eurozone economy from sluggish growth into recession.” Donald Trump’s campaign mostly focused on tariffs levied by the European Union on vehicle imports.

ING asserted that the European Union would have negotiation leverage due to the United States’ dependence on the EU for strategically essential commodities, especially in the chemical and pharmaceutical industries.

Gary Hufbauer, a nonresident senior scholar at the Peterson Institute for International Economics, contends that “European nations will be less willing to negotiate any accord with Donald Trump than Canada or Mexico.” Hufbauer made this statement.

He argues that the European Union’s initiative to reduce vehicle tariffs and augment imports of agricultural items from the United States, such as soybeans, may be inadequate for a government pursuing improved market access or exemptions from particular regulations.

He asserts that if the United States enacts tariffs, the European Union will probably respond to significant American goods such as whiskey or iPhones.

European nations may pursue redress from the World Trade Organization (WTO); nevertheless, even a favorable ruling from the WTO may not significantly affect U.S. policy.

Ursula von der Leyen, the current President of the European Union, has declared her determination to seek “constructive cooperation” with the pertinent authorities in the United States. Jovita Neliupsiene, the European Union’s ambassador to the United States, has stated that the organization is ready to tackle any forthcoming trade problems.

Preventing further decline

Yaros posits that the United States might concentrate on Asian economies, including South Korea and Japan, owing to their exports of automobiles and metals. Furthermore, Vietnam may undergo scrutiny regarding its solar panels.

In recent years, the United States’ trade deficit with Vietnam has widened due to a rise in imported commodities.

Yaros has claimed that the countries impacted by Donald Trump’s tariffs will “respond in a manner that is commensurate with the actions undertaken by the US, but will not surpass them.” This statement was released to avert a worsening of the problem.

He asserted that, according to historical records, China might choose to eschew a similar response in favor of actions like export bans.

Daniel Russell of the Asia Society Policy Institute has disclosed that both Seoul and Tokyo are meticulously planning for the possible implementation of tariffs.

He asserts that allies such as South Korea will leverage their Donald Trump significant high-tech investments in the United States to request exemptions from all tariffs imposed by the United States.

SOUREC: NDTV

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