At the Aix meetings, the trade war is bothering economists

"How far will Donald Trump go?" At the meetings of Aix-en-Provence, the commercial war initiated by the American president provokes cold sweats in the economists, who warn against a gearing "which could be dangerous" for the world growth.

" It's not about being catastrophic, but clearly the prospects are not good. " For Philippe Aghion, professor at the College de France, the introduction of new taxes on US imports, decided by Washington on Friday, does not bode well.

"It will stall global growth, probably for several years ", insists the economist, for whom international trade" increases the opportunities for innovators "and" stimulates competition, which is good for innovation. "

" We are in an escalation: every retaliatory march is higher, "worries his side Agnès Bénbady-Quéré, professor at the Paris School of Economics. But a trade war, "it's a game with negative sum, all countries lose," adds the researcher.

– "Eye for an eye, tooth for tooth" –

The United States imposed Friday tariffs on Chinese goods worth an estimated 34 billion euros, including automobiles and aircraft components, accusing China of "theft of intellectual property" and "unfair competition".

Beijing immediately announced retaliatory measures, with tariff increases of around 25% on some 540 products, blaming Washington for triggering "the biggest trade war in economic history"

A tussle likely to cause trouble, especially in the financial markets, in a cyclical climate already marked by several factors of uncertainty, both on the evolution of interest rates and oil prices.

"The danger" is that we enter a logic of "+ eye for eye, tooth for tooth +, until we get really bad on both sides", says Olivier Blanchard, researcher at the Peterson Institute and former chief economist of the International Monetary Fund.

An opinion shared by Patrick Artus, chief economist at Natixis. "At this stage, the effect of customs measures" announced in recent weeks "should remain minimal," said the economist, which refers to an impact of 0.15 percentage point of GDP for the United States and 0.06 point of GDP for the world as a whole

"But if the United States continues to impose customs duties on larger amounts in volume, it could lead to significant losses of activity", with the key " consequences on employment, "he warns.

-" Liar Poker "-

Concerns among economists are even greater than Donald Trump – who has already increased in early June taxes on imports of steel and aluminum – threatens to go further by introducing 25% taxes on imports of European cars.

"If these measures are implemented, the commercial war started by Donald Trump will enter another dimension, "said Philippe Aghion. "The question of the car, it will be the hour of truth", abounds Ludovic Subran, chief economist at Euler Hermes.

In a note handed Monday to Matignon, the Council of economic badysis (CAE) estimated that 'a total' trade war 'would lose 3 to 4 points of GDP in the United States, China and Europe permanently.

In such a case, trade between France and the rest of the non-EU world would collapse by 42%, with an impact comparable to that of the 2008 crisis, added the CAE.

What will be Donald Trump's final decision? And what will be, in this case, the response of its partners? "At this point, I think we are still in a game of liar poker," said Ludovic Subran, who calls to "stand back from the increasing anxiety markets."

"The reason why it worried everyone is that it comes from the United States. But "the pragmatism will prevail", estimates the economist.

"The question is how far will go Donald Trump? And honestly, one does not know", estimates for its part Patrick Artus, calling to prudence. "In some cases it has been quite pragmatic, and in others it is irrational."