No winners in a trade war: US cannot continue to grow if its trading partners shrink
Economists estimate the impact of the likely tariffs so far would add half a percentage point to US consumer inflation this year
THE US consumer’s pocketbook and the bull market in stocks could be the first casualties of President Donald Trump’s trade war.
Former Treasury secretary Larry Summers summed up this risk in no uncertain terms when he described Trump’s warning to the world as: “Stop, or I’ll shoot myself in the foot”. The best that can be said of the protectionist policies is that they artificially preserve jobs in heavy industries in the United States.
In a surprising move to this end, Trump imposed an additional 25 per cent tariffs on all imports of two vital industrial metals – steel and aluminium. The Economist called the metals tariffs “an act of self-harm” because they would drive up the costs of consumer goods and splinter already-delicate supply chains.
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