Trump’s Warning Shot on Trade Risks Igniting a Wider Conflict
- 6 years ago
Trump’s Warning Shot on Trade Risks Igniting a Wider Conflict
Though Mr. Trump stepped back from plans to impose tariffs on every nation — exempting, for the time being, Canada and Mexico — he did so while exerting additional pressure: He emphasized
that tariffs could ultimately land on both countries unless they bend to American demands in renegotiations of the North American Free Trade Agreement.
Faced with a rebuke from the global trading body, Mr. Trump might pull the United States out of the institution.
Mr. Trump’s decision to back off from across-the-board tariffs came in the face of strident warnings from the American business world and leaders of his own Republican Party
that such a course would damage the American economy and alienate allies.
“You put a premium on doing damage rather than deterring bad behavior.”
Mr. Trump and his advisers appear to be calculating that, as the largest economy on earth,
the United States possesses enough muscle to dictate the terms of world trade.
“The level of tension between the United States and its major trading partners is probably more tense than it has been at any
time since the early 1980s,” said Meredith Crowley, an international trade expert at the University of Cambridge in England.
Mr. Trump maintains that Americans have been outwitted by savvier trading partners, with tariffs needed to force jobs to return to the United States.
“They are under the delusion that the United States has been screwed by the global system that it created,” Mr. Posen said.
Though Mr. Trump stepped back from plans to impose tariffs on every nation — exempting, for the time being, Canada and Mexico — he did so while exerting additional pressure: He emphasized
that tariffs could ultimately land on both countries unless they bend to American demands in renegotiations of the North American Free Trade Agreement.
Faced with a rebuke from the global trading body, Mr. Trump might pull the United States out of the institution.
Mr. Trump’s decision to back off from across-the-board tariffs came in the face of strident warnings from the American business world and leaders of his own Republican Party
that such a course would damage the American economy and alienate allies.
“You put a premium on doing damage rather than deterring bad behavior.”
Mr. Trump and his advisers appear to be calculating that, as the largest economy on earth,
the United States possesses enough muscle to dictate the terms of world trade.
“The level of tension between the United States and its major trading partners is probably more tense than it has been at any
time since the early 1980s,” said Meredith Crowley, an international trade expert at the University of Cambridge in England.
Mr. Trump maintains that Americans have been outwitted by savvier trading partners, with tariffs needed to force jobs to return to the United States.
“They are under the delusion that the United States has been screwed by the global system that it created,” Mr. Posen said.