By Alok Acharja:
Since Donald Trump came to power in the United States, the policy of imposing tariffs on various countries and the counter-tariffs that are being imposed in return are leading the world towards a trade war. However, during Trump’s first term in power, the situation was a little different. The policy of the United States was also different then. This trade war was that time mainly between the United States and China. This was more prevalent then. And due to the US-China trade war, this term is quite discussed today. It was also conceivable that it was going to start anew. This time, Trump is moving forward with a policy that the United States will impose tariffs not only on China but also on the products of the countries that take tariffs on US products.
As a result, it goes without saying that many countries may be fall in trouble. The United States is the superpower of this time and is capable of leading the world. Therefore, at least the United States has been exempting some of its allies so far. For example, India. This time, India is probably not getting any exemption either. At least these things are quite clear in Trump’s words. Here, Trump’s policy will strengthen the US economy. However, the sole hegemony of the US may have an impact. Because if it gets more opportunities than other countries, then countries will turn away from the US just to save their own economies. As a result, a new circle may be created in the world. Where nearby countries can unite to protect themselves.
On the other hand, if the US wants to maintain its position in the continuity of hegemony, allied countries will have to make some concessions. This has been the policy so far. Although it’s a policy of give and take, there was some relaxation. Now, which seems much more difficult. Trump’s policy can mainly give rise to two events. First, some allied countries will have to be forced to build alliances outside the US and second, there is a possibility of indirect distance with the US’s tested allies.
Recently, according to Reuters, US President Donald Trump said in an announcement that he will impose tariffs on the entire world. Which he referred to as the US’s ‘Liberation Day’. He also said that this tariff will be effective from April 2. Until now, the discussion was that the US would impose retaliatory tariffs only on those countries that impose import tariffs on US products or countries with which the US has a trade deficit. But Trump has now made it clear that this is not limited to specific countries. Rather, it is going to start all over the world. Here, the US President has made it clear that this is basically against all countries that have received a little more benefit from the US so far. It is going to stop. In Trump’s sentence, ‘We will start imposing tariffs on all countries, let’s see what happens.’
Trump also said that he will be relatively ‘polite’, ‘generous’ and ‘kind’ to those who have imposed tariffs on the US. In his words, ‘These countries have cheated us more than any country in history, and we will treat them much better than them. But it will bring in a huge amount of revenue for the United States. China has already felt the impact of the US tariffs. Because the Trump administration has imposed tariffs on steel, aluminum and other Chinese products. Trump’s top trade advisor Peter Navarro has claimed, ‘It is possible to collect $ 100 billion a year from car import tariffs alone. And if tariffs are imposed on all countries, it will bring in about $600 billion a year in revenue, which will be $ 6 trillion in 10 years.’ As a result, the US economy has created an opportunity for apparent recovery.
Economists are always keeping a close eye on this event to see what happens as a result of this war. They doubt resulting the trade war, the economic recession around the world may intensify. Because it is closely related to the global economy. What is a trade war? In simple terms, a trade war is when a country first imposes tariffs on goods imported from another country and when the other country also takes similar measures, a trade war begins between the two countries. In short, it is like tit for tat. A trade war is a strategy that weakens the progress of a country for a short time or puts it in temporary trouble. A direct war with weapons is a very troublesome matter and has the potential to cause massive loss of life. A trade war is therefore another strategy.
Like a war, both countries suffer more or less. Along with this, many other countries suffer. The trade war between the two countries is not limited to themselves, but its impact has started to spread to other countries as well. It is not possible to say right now what its consequences will be in the end or how it will end. Although the trade war is not fatal, it is certainly worrisome. As a result, those involved in the financial sector fear that a severe recession is looming in the global economy. The global economic system is about to be turned upside down. It has already started working in China, on the others countries are stopped for three months. The trade war with the United States has destabilized the entire world trade. As the lack of confidence is evident, it will be easier to escape from a possible recession.
It is not possible to fully predict what kind of impact Trump’s decision may have in the long term at the moment. However, this is the assumption of analysts. I will come to that later. A recession in the United States is a long-term state of widespread deterioration in economic activity, which is usually understood by increasing unemployment and decreasing income. A group of economic analysts has recently warned that the risk of a world recession is increasing. This is because if another country offers more benefits than the United States at relatively low tariffs, new trade will start with that country and the pace of economic flow to the United States may slow down. At the same time, unemployment will increase in the country and employment will shrink. Because there have been massive layoffs in various sectors since Trump came to power and pressure is already increasing on new employment.
According to a study by Aston University Business School, Trump’s tariff policy could cause global losses of 1.4 trillion dollars (1.1 trillion pounds). Because, due to Trump’s tariff policy, trade routes will change and transportation costs will increase, then the price of any product will naturally increase. The relationship between large economies and small economies is becoming unstable. Especially countries that depend on large countries for economic lanes. US President Donald Trump started a trade war with China to address the trade deficit. This was one of his election promises. History shows that in 1930, to deal with the economic depression, the United States imposed tariffs on about 20,000 product exports by implementing the Smoot and Hawley Act of 1930. As a result, various countries in Europe and America suffered commercial losses. Then the United States also suffered counterattacks and the US economy also suffered.
Finally, this law was repealed. Many countries will suffer in the current trade war that has begun. Because according to Trump, this tariff will be mutual and fair. Now, if tariffs are imposed on this basis, many countries will face a large trade deficit. At the moment, those whose products enter the United States at low tariffs will no longer be able to do so. As a result, its impact is bound to be felt on the economy. As a result, the United States may not be able to remain free from the damage of the trade war that is starting around the world.
Alok Acharja is an Essayist and Columnist Pabna.