Trump's protectionism will generate a $ 1 billion trade war

The United States is expected to impose tariffs on US $ 34 billion of imports from China as of Friday; and Beijing is ready to respond for an equal amount while the trade confrontation between the two largest economies is growing. If we add to that the rising tariffs and rates in the Atlantic and North America, the trade value affected by the economic wars that Donald Trump initiated will reach $ 100 billion. Americans before the end of the week. But that's just the beginning.

Soon, Trump's trade wars could easily exceed one trillion dollars. It is likely to have economic consequences for both United States. as for the world. According to last year's figures, it would equate to a quarter or more of the total trade of US $ 3.9 billion with the rest of the world and cover at least 6% of the world's merchandise trade (which was in 2017 $ 17.5 billion, according to the World Trade Organization.)

There are three reasons to think that a $ 1 trillion trade war is not totally improbable :

1. The Trump-China wars could soon be wars for $ 600 billion.

The $ 34,000 million Chinese imports that the Trump administration will apply to tariffs that come into effect on July 6 are roughly equivalent to one month of imports from China.

will apply a 25% import tax to 818 products ranging from water heaters and towers to industrial robots and electric cars. In return, Beijing will start charging a similar rate on July 6 on a list of soya, seafood and crude oil.

The two countries have already published lists of additional products that would raise US $ 50 billion. However, outraged by China's retaliation, Trump ordered in June that an additional 10 percent tariff on an additional $ 200,000 million be applied to imports from China and threatened with an additional $ 200 million. dollars. beyond this figure. Given this, Beijing has promised its own answer.

Put American tariff threats into perspective. For $ 450 billion, total merchandise imports from China last year were $ 505,500 million, while US exports to China reached a record $ 129,900 million. of dollars.

say that we could be a few months away from the majority, or the total, of the $ 635,400 million in trade impacted by the new tariffs while China is putting in place other measures to asymmetrical reprisals to fill the void.

2 In a television interview Sunday, the US president described his plan to apply tariffs on imported cars and coins in the name of national security as a Trump auto dispute could reach a value greater than $ 600,000 million the largest of its commercial earthquakes. And without a doubt, they see it in the EU and elsewhere.

According to official data, the United States imports cars and trucks for US $ 191,700 million in 2017 and spare parts for US $ 143,100 million, for a total of US $ 334,800 million. .

An investigation is underway on whether vehicle imports pose a threat to US national security and, while it's easy to make fun of the idea that a BMW or a Toyota could endanger the safety of any nation, the Trump Administration has made it clear that it considers defending its manufacturing industry as a national security priority. The same justification was used to set tariffs on steel and aluminum at the beginning of the year

. As for tariffs on metals, Trump seems to believe that those applied to motor vehicles will influence the EU and Japan. in trade negotiations, as well as on Canada and Mexico in the Nafta change talks.

Trump pushes to force surrender. For this reason alone, the idea that the United States can impose 20% tariffs on all or part of these imports should not be ruled out because it sounds absurd. And it is likely that any American fare will receive retaliation.

But in an extreme scenario, involving "eye to eye" tariffs, more than $ 650 billion in global trade will be affected, with consequences for businesses worldwide.

3. Do not Forget Nafta

Often, the fact that the United States is lost in the global conversation is lost. it maintains larger trade with Canada and Mexico (US $ 1.1 billion) than with China, Japan, Germany and the United Kingdom combined.

After criticizing the disaster that he sees in the current version Trump is trying to renegotiate it while Mexico has just elected a new president, further complicating the process

Canada and Mexico are reluctant to accept requests from the United States, who want to add new items, such as a clause that expires the trade agreement every five years.

But the United States He injected uncertainty into the talks with his decision to apply tariffs on steel and aluminum in Canada and Mexico, as well as on the car threat. US imports of cars and parts from its Nafta partners – most of its overseas purchases came from US manufacturers for US $ 158.3 billion in 2017. US exports to Canada and Mexico have reached the US dollar. 87,800,000.